-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, ALddlEN6Rjo6KDA5iccBfw/916tM1NnCJiYc0M0UU3CsXAkFzORNwbl2oWEKncaB 3wLTy0N2KgTUVzgkl3kkkg== 0001091818-03-000154.txt : 20030519 0001091818-03-000154.hdr.sgml : 20030519 20030519151501 ACCESSION NUMBER: 0001091818-03-000154 CONFORMED SUBMISSION TYPE: SC 13D PUBLIC DOCUMENT COUNT: 6 FILED AS OF DATE: 20030519 FILED BY: COMPANY DATA: COMPANY CONFORMED NAME: MCCLEARY LARRY CENTRAL INDEX KEY: 0001233794 FILING VALUES: FORM TYPE: SC 13D BUSINESS ADDRESS: STREET 1: 1727 HANKER AVENUE CITY: PALO ALTO STATE: CA ZIP: 94301 BUSINESS PHONE: 3035269239 SUBJECT COMPANY: COMPANY DATA: COMPANY CONFORMED NAME: HUMAN BIOSYSTEMS INC CENTRAL INDEX KEY: 0001070181 STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-COMMERCIAL PHYSICAL & BIOLOGICAL RESEARCH [8731] IRS NUMBER: 770481056 STATE OF INCORPORATION: CA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: SC 13D SEC ACT: 1934 Act SEC FILE NUMBER: 005-78213 FILM NUMBER: 03710403 BUSINESS ADDRESS: STREET 1: 1127 HARKER AVE CITY: PALO ALTO STATE: CA ZIP: 94301 BUSINESS PHONE: 6503230943 MAIL ADDRESS: STREET 1: 1127 JARKER AVENUE CITY: PALO ALTO STATE: CA ZIP: 94301 SC 13D 1 mccleary030516_13d.txt SECURITIES OWNERSHIP SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 SCHEDULE 13G Under the Securities Exchange Act of 1934 HUMAN BIOSYSTEMS ---------------------------------- (Name of Issuer) Common Stock ------------ (Title of Class of Securities) 44485X109 --------- (CUSIP Number) Harry Masuda, Chief Executive Officer Human BioSystems 1127 Harker Avenue, Palo Alto, CA 94301 Tel. (650) 323-0943 Fax (650) 327-8658 -------------------- (Name, Address and Telephone Number of Person Authorized to Receive Notices and Communications) May 6, 2003 -------------------- (Date of Event Which Requires Filing of this Statement) If the filing person has previously filed a statement on Schedule 13G to report the acquisition that is the subject of this Schedule 13D, and is filing this schedule because of 240.13d-1(e), 240.13d-1(f) or 240.13d-1(g), check the following box. [ ] Note: Schedules filed in paper format shall include a signed original and five copies of the schedule, including all exhibits. See 240.13d-7 for other parties to whom copies are to be sent. The remainder of this cover page shall be filled out for a reporting person's initial filing on this form with respect to the subject class of securities, and for any subsequent amendment containing information which would alter disclosures provided in a prior cover page. The information required on the remainder of this cover page shall not be deemed to be "filed" for the purpose of Section 18 of the Securities Exchange Act of 1934 ("Act") or otherwise subject to the liabilities of that section of the Act but shall be subject to all other provisions of the Act (however, see the Notes). CUSIP NO. 44485X109 - --------------------------------------------------------------------- 1) Name of Reporting Person S.S. or I.R.S. Identification No. of Above Person Larry McCleary, M.D. and Christine McCleary - --------------------------------------------------------------------- 2) Check the Appropriate Box (a) if a Member of a Group ------------------------- (See Instructions) (b) - --------------------------------------------------------------------- 3) SEC Use Only - ---------------------------------------------------------------- 4) Source of Funds (See Instructions) PF - ---------------------------------------------------------------- 5) Check if Disclosure of Legal Proceedings Is Required Pursuant to Items 2(d) or 2(e) [ ] - ---------------------------------------------------------------- 6) Citizenship or Place of Organization: United States - ---------------------------------------------------------------- Number of (7) Sole Voting Shares Bene- Power 2,718,784 ficially Owned by ----------------------------------------------------- Reporting (8) Shared Voting Person With Power 0 ----------------------------------------------------- (9) Sole Dispositive Power 2,718,784 ----------------------------------------------------- (10) Shared Dispositive Power 0 11) Aggregate Amount Beneficially Owned by Each Reporting Person: 2,718,784 shares - ---------------------------------------------------------------- 12) Check if the Aggregate Amount in Row (11) Excludes Certain Shares (See Instructions) [ ] - ---------------------------------------------------------------- 13) Percent of Class Represented by Amount in Row (11) - 10.15% - ---------------------------------------------------------------- 14) Type of Reporting Person (See Instructions): IN - ---------------------------------------------------------------- 3 CUSIP NO. 44485X109 Item 1 Security and Issuer - ------------------------- This statement relates to the common stock, no par value ("Common Stock") of Human BioSystems, a California corporation ("Issuer"). The principal executive offices of the Issuer are located at 1127 Harker Avenue, Palo Alto, California, 94301 Item 2. Identity and Background - --------------------------------- This statement is filed by Larry McCleary, M.D and Christine McCleary, husband and wife (together, the "McCleary's"). Neither of the McCleary's has, during the last five years, been convicted in a criminal proceeding (excluding traffic violations or similar misdemeanors). Neither of the McCleary's has been, within the last five years, a party to a civil proceeding of a judicial or administrative body of competent jurisdiction. Item 3. Source and Amount of Funds or Other Consideration - ---------------------------------------------------------- In May of 2003, the McCleary's purchased 666,667 shares and acquired warrants to purchase another 50,000 shares of Common Stock of the Issuer in consideration for $100,000. In December of 2002, the McCleary's purchased 400,000 shares of Common Stock of the Issuer in consideration for $100,000. In November of 2002, the McCleary's purchased 400,000 shares of Common Stock of the Issuer in consideration for $100,000. In October of 2002, the McCleary's purchased 400,000 shares of Common Stock of Issuer in consideration for $100,000. In September of 2002, the McCleary's purchased 400,000 shares of Common Stock of the Issuer in consideration for $100,000. In August of 2002, the McCleary's purchased 200,000 shares of the Common Stock of the Issuer in consideration for $50,000. In July of 2002, the McCleary's purchased 200,000 shares of Common Stock of Issuer in consideration for $50,000. 266 shares were issued on January 17, 2000 to Christine McCleary. In January of 2000, under a Subscription Agreement which was later rescinded and a promissory note issued, the McCleary's purchased 14,000 shares of Common Stock of the Issuer in consideration for $21,000. In January of 2001, the McCleary's purchased 51,851 shares of Common Stock of the Issuer in satisfaction of the Issuer's obligations under the promissory note payable to the McCleary's in the principal amount of $21,000. All Common Stock of the Issuer was purchased with the McCleary's' personal funds, except for the January of 2001 acquisition of 51,851 shares which were purchased in satisfaction of the Issuer's obligations under a promissory note. 4 Item 4. Purpose of Transaction - ------------------------------- The purpose of all transactions pursuant to which the McCleary's have acquired Common Stock of the Issuer is for investment only. Item 5. Interest in Securities of the Issuer - --------------------------------------------- (a) 2,718,784 shares are beneficially owned by the McCleary's. These shares constitute 10.15% of the shares of the common stock currently issued and outstanding. (b) The McCleary's have the sole power to vote and to dispose of all of the shares beneficially owned. (c) The McCleary's have purchased 666,667 shares of Common Stock during the last sixty (60) days at $0.15 per share, pursuant to a Subscription Agreement dated May 6, 2003. They have also acquired warrants to purchase 50,000 shares of the Common Stock at a purchase price of $0.15 per share. On May 6, 2003, Larry McCleary was granted stock options to purchase 30,000 shares of Common Stock at $0.15 per shares, of which 15,000 options are exercisable one year from the grant date with the remaining 15,000 options exercisable two years from the grant date; the options to expire five years from the date of grant. (d) None. (e) Not applicable. Item 6. Contracts, Arrangements, Understandings or Relationships with Respect to Securities of the Issuer --------------------------------------------------------- The Issuer and the McCleary's have entered into that certain Stock Purchase Agreement dated July 23, 2002, with respect to the purchase of an aggregate of 2,000,000 shares of the Issuer's common stock. The McCleary's acquired warrants to purchase 50,000 shares of Common Stock at a purchase price of $0.15 pursuant to a Warrant Agreement dated May 6, 2003 by and between Christine McCleary and the Issuer. The McCleary's acquired an option to purchase 30,000 shares of Common Stock pursuant to an Option Agreement dated May 6, 2003 by and between Larry McCleary and the Issuer. The option is exercisable for 5 years at a price of $0.15 per share. The Option is exercisable as to 15,000 shares upon the date that is one year from the date of grant, and becomes exercisable as to all 30,000 shares two years from the date of grant. The Issuer and Larry McCleary entered into a Subscription Agreement dated January 15, 2001 and a Stock Purchase Agreement dated January 17, 2000. Except for the above referenced Stock Purchase Agreement, the Subscription Agreements, the Warrant Agreement and the Option Agreement, the McCleary's are not a party to any contract, arrangement, understanding or relationship (legal or otherwise) required to be disclosed by Item 6 of Schedule 13D. Item 7. Material to Be Filed as Exhibits - ------------------------------------------ Exhibit 99.01 Warrant Agreement dated May 6, 2003, by and between the Issuer and Christine McCleary. Exhibit 99.02 Subscription Agreement dated May 6, 2003 by and between the Issuer and Christine McCleary Exhibit 99.03 Option Agreement dated May 6, 2003 by and between the Issuer and Larry McCleary. Exhibit 99.04 Stock Purchase Agreement dated July 23, 2002, by and between the Issuer and Larry McCleary. Exhibit 99.05 Subscription Agreement dated January 15, 2001 by and between the Issuer and Larry McCleary. By signing below I certify that, to the best of my knowledge and belief, the securities referred to above are not held for the purpose of or with the effect of changing or influencing the control of the issuer of the securities and were not acquired and are not held in connection with or as a participant in any transaction having that purpose or effect. SIGNATURE After reasonable inquiry and to the best of my knowledge and belief, I certify that the information set forth in this statement with respect to it is true, complete and correct. Date Signature By Name and Title ====================================================================== EX-99.01 3 ex9904_13dmc.txt WARRANT AGREEMENT EXHIBIT 99.04 STOCK PURCHASE AGREEMENT This Stock Purchase Agreement (the "Agreement"), dated as of July 23, 2002, is by and between Larry McCreary, M.D. (the "Purchaser") and HyperBaric Systems, a California corporation (the "Seller"), with respect to the following: WHEREAS, the Seller desires to offer and sell an aggregate of Two Million (2,000,000) shares of the common stock of HyperBaric Systems ("HYRB") at a price of Twenty-Five Cents ($.25) per share, for an aggregate purchase price of Five Hundred Thousand Dollars ($500,000) (the "Shares") in accordance with the terms and conditions set forth herein, and WHEREAS, the Purchaser desires to buy the Shares from the Seller in accordance with the terms and conditions set forth herein. THEREFORE, the Purchaser and the Seller agree as follows: 1. SALE OF SHARES. Purchaser hereby agrees to purchase the Shares for an aggregate purchase price of Five Hundred Thousand Dollars ($500,000) (the "Purchase Price"). 2. PAYMENT OF PURCHASE PRICE; DELIVERY OF SHARES. Commencing on August 1, 2002, Seller shall send to Buyer on the first (1st) and fifteenth (15th) days of each month, via certified check or wire transfer, the sum of Fifty Thousand Dollars ($50,000) (each such payment an "Installment") in consideration of the issuance and sale of Two Hundred Thousand (200,000) of the Shares (each "Installment Shares"). Upon receipt by Seller of each Installment, Seller shall immediately cause its transfer agent to send to the Purchaser, via Federal Express or some other overnight courier, a certificate for the Installment Shares. The final Installment shall be due on December 15, 2002, and the final Installment Shares shall be issued, on December 31, 2002. 3. REPRESENTATIONS AND WARRANTIES OF SELLER. Seller represents and warrants to the Purchaser as follows: a. Ownership and Authority to and Sell. Seller represents and warrants to the Purchaser that the Shares will be fully paid and non-assessable and upon payment of the Purchase Price will be free and clear of all liens and encumbrances and that the sale of the Shares as set forth in this Agreement does not breach or cause a default upon any contract or agreement to which the Seller is a party. b. Registration Statement. The Shares were registered on a Form SB-2 Registration Statement that was declared effective on February 7, 2002. Seller agrees, at its sole cost and expense, to have any opinion letters required by this transaction delivered to Purchaser. The Registration Statement is currently effective and the Seller has no knowledge, information or belief that the effectiveness of the Registration Statement will be suspended or revoked. c. Authorization to Convey the Shares. Seller, through its President and CEO, has full power and authority to sell, convey and transfer the Shares to Purchaser and otherwise consummate the transactions contemplated by this Agreement and receive payment for the Shares as contemplated by this Agreement. Purchaser shall acquire good and marketable title to such Shares, free and clear of all liens. No authorization, approval or consent of any third party is required for the lawful execution, delivery and performance of this Agreement by Seller. Seller shall also send Purchaser a copy of the board resolution authorizing and approving the sale of the Shares to Purchaser. d. Noncontravention. This Agreement constitutes a valid and legally binding obligation of Seller, enforceable against it in accordance with its terms. Neither the execution and delivery of this Agreement, nor the consummation of the transactions contemplated hereby in the manner herein provided, will constitute a violation of or default under, or conflict with, any judgment, decree, statute or regulation or any governmental authority applicable to Seller or any contract, commitment, agreement or restriction of any kind to which Seller is a party or by which its assets are bound. The execution and delivery of this Agreement does not, and the consummation of the transactions described herein will not, violate applicable law, or any mortgage, lien, agreement, indenture, lease or understanding (whether oral or written) of any kind outstanding relative to Seller. e. Governmental Authorizations. Seller is not required to obtain authorization, approval, consent, or order of, or make a registration or filing, with, any court or other governmental body in connection with the execution and delivery by Seller of this Agreement and the consummation by Seller of the transactions contemplated hereby. f. No Conflict With Other Instruments. The execution of this Agreement and the consummation of the transactions contemplated hereby, will not result in the breach of any term or provision of, constitute an event of default under, or require the consent or approval of any third-party pursuant to, any material contract, agreement, or instrument to which Seller is a party. g. No Misrepresentations. None of the information contained in the representations and warranties of Seller set forth in this Agreement contains any untrue statement of a material fact or omits to state a material fact necessary to make the statements contained herein not misleading. 4. REPRESENTATIONS AND WARRANTIES OF PURCHASER - The Purchaser represents and warrants as follows: a. Non-Affiliation with Seller. The Purchaser is not now and has not been for at least ninety (90) days from the date of this Agreement, an Affiliate of the Seller, as that term is defined in Rule 405 of the Securities Act of 1933, as amended. b. Execution, Delivery, Authorization, Approval and Performance of Agreement. The execution, delivery and performance by Purchaser of this Agreement have been duly authorized by the Purchaser and do not and will not conflict with or constitute a default, breach or violation under any provision of applicable law or regulation or of any agreement, judgment, injunction, order, decree or other instrument binding upon Purchaser or to which its properties are subject. This agreement, when executed and delivered by Purchaser, will constitute the legal, valid and binding obligation of Purchaser enforceable against the Purchaser in accordance with its terms, except as may be limited by applicable bankruptcy, insolvency, reorganization, moratorium and other laws of general application affecting enforcement of creditors' rights generally. c. Reliance on Form 10-KSB and 10-QSBs. Purchaser has received copies of the Seller's Annual Report on Form 10-KSB for the year ended December 31, 2001 and Quarterly Reports on Form 10-QSB for the quarters ended March 31, 2002 and June 30, 2002. Seller shall make available for inspection and review by the Purchaser all financial and other records, all filings with the SEC, and all other corporate documents and properties of the Seller as may be reasonably necessary for the sole purpose of enabling Purchaser to conduct initial and ongoing due diligence with respect to the Seller and the accuracy of the Registration Statement. Seller shall not disclose nonpublic information to the Purchaser or to its advisors or representatives unless prior to disclosure of such information the Seller identifies such information as being nonpublic information and provides the Purchaser and such advisors and representatives with the opportunity to accept or refuse to accept such nonpublic information for review. 5. SURVIVAL OF REPRESENTATIONS AND WARRANTIES. The above Representations and Warranties shall survive the sale of the Shares and may be relied upon by Seller and Purchaser so long as the relying party does not have actual knowledge of the invalidity or inaccuracy of said representations and warranties. 6. INDEMNIFICATION. a. Indemnification by Seller. Seller hereby agrees to indemnify and hold harmless Purchaser and all of its shareholders, officers, directors, employees and direct or indirect investors and any of the foregoing person's agents or other representatives (including, without limitation, those retained in connection with the transactions contemplated by this Agreement) (collectively, the "Indemnitees") from and against and in respect of: (i) Any and all damage or deficiency, including reasonable attorneys fees and costs, resulting from any misrepresentation, breach of any representation or warranty or non-fulfillment of any agreement on the part of Seller under this Agreement or any instrument or document delivered to Purchaser in connection therewith; and (ii) Any and all actions, suits, claims, proceedings, demands, assessments, judgments, costs and reasonable legal and other expenses incidental to any of the foregoing. To the extent that the foregoing undertaking by the Seller may be unenforceable for any reason, the Seller shall make the maximum contribution to the payment and satisfaction of each of the indemnified liabilities set forth above which is permissible under applicable law. The indemnity provisions contained herein shall be in addition to any cause of action or similar rights the Purchaser may have, and any liabilities to which the Purchaser may be subject. b. Indemnification by Purchaser. Purchaser hereby agrees to indemnify and hold harmless Seller from and against and in respect of: (i) Any and all damage or deficiency, including reasonable attorneys fees and costs, resulting from any misrepresentation, breach of any representation or warranty or non-fulfillment of any agreement on the part of Purchaser under this Agreement or any instrument or document delivered to Purchaser in connection therewith; and (ii) Any and all actions, suits, claims, proceedings, demands, assessments, judgments, costs and reasonable legal and other expenses incidental to any of the foregoing; 7. GOVERNING LAW. This Agreement and the legal relations among the Parties hereto shall be governed by and construed in accordance with the laws of the State of California and that the State or Federal Courts of California shall be the jurisdiction in which any legal proceedings relative to this Agreement shall be brought. The foregoing notwithstanding, the Seller agrees to the arbitration of any disputes relative to this Agreement through the services of a bona fide independent arbitration service within the United States, at the election of the Purchaser, in Purchaser's sole and absolute discretion. Upon Purchaser's written request, arbitration shall be conducted by a panel of three, in accordance with the commercial rules then in existence with the American Arbitration Association, with hearings to take place in Santa Clara County, California and the laws of the State of California shall apply. Any judgment or award rendered by arbitration may be entered in any court having jurisdiction. The parties acknowledge that, in addition to any and all damages deemed fair by the arbitrators, the award may be expanded to include, but not be limited to, any and all court or arbitration costs, reasonable attorney fees and any other costs or charges reasonably necessary to the adjudication of the controversy. Nothing contained herein shall deprive any party of the right to obtain injunctive or other equitable relief. Remedy at law for any breach or threatened breach of this Agreement being inadequate, any party hereto is entitled to enforce the specific performance of this Agreement and to seek both temporary or permanent injunctive relief without the necessity of providing actual damages outside of the terms of this Agreement. The parties agree that a facsimile transmission of this signed agreement shall be legal and binding. 8. NOTICES. All notices hereunder shall be in writing and be delivered or mailed, certified mail with return receipt requested, to the following addresses, or by telegram sent to the following addresses with written confirmation thereafter forwarded: To the Seller: Attention: Harry Masuda HyperBaric Systems 1127 Harker Avenue Palo Alto, CA 94301 Phone: 650-323-0943 Fax: To the Purchaser: Larry McCleary, M.D. xxxxxxxxxxxxx South Golden, CO 80401 Phone: xxxxxxxxxxxx Fax: xxxxxxxxxxxxxx 9. MISCELLANEOUS. a. Entire Agreement. This Agreement, including the other documents referred to herein, embodies the entire agreement and understanding of the Parties hereto in respect of the subject matter contained herein. There are no restrictions, promises, warranties, covenants, or undertakings, other than those expressly set forth or referred to herein. This Agreement supersedes all prior agreements and understandings between the Parties with respect to such subject matter. b. Amendment. This Agreement may not be amended, supplemented or modified in whole or in part except by an instrument in writing signed by the party or parties against whom enforcement of any such amendment, supplement or modification is sought. c. Legal Representation. The Seller and Purchaser agree that they have had adequate opportunity to consult with their own legal counsel concerning this Agreement and the transactions contemplated thereunder. d. Construction. The Seller and Purchaser hereto and their respective legal counsel participated in the preparation of this Agreement; therefore, this Agreement shall be construed neither against nor in favor of any of the parties hereto, but rather in accordance with the fair meaning thereof. e. Accuracy of Representations. The representations and warranties made by each party in this Agreement were true when made and shall be true at the closing (except for changes therein permitted by this Agreement), and such party shall have performed or complied with all covenants and conditions required by this Agreement to be performed or complied with by such party prior to or at the closing. f. Counterparts. This Agreement may be executed in one or more counterparts, each of which will be deemed an original and all of which together will constitute one and the same instrument. It is expressly agreed that the Agreement may be executed with facsimile signatures which shall be deemed originals. EXECUTED BY THE PARTIES HERETO AS OF THE DATE FIRST APPEARING ABOVE. SELLER: HYPERBARIC SYSTEMS PURCHASER: By: ---------------- ------------------ Harry Masuda, its President and CEO Larry McCleary,M.D. EX-99.02 4 ex9901_13dmc.txt SUBSCRIPTION AGREEMENT EXHIBIT 99.01 THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"). THESE SECURITIES HAVE BEEN ACQUIRED FOR INVESTMENT PURPOSES ONLY AND NOT WITH A VIEW TO DISTRIBUTION OR RESALE, AND MAY NOT BE SOLD, OFFERED FOR SALE, PLEDGED OR HYPOTHECATED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT WITH RESPECT TO THE SECURITIES UNDER THE ACT OR PURSUANT TO RULES 144 OR 144A UNDER THE ACT OR PURSUANT TO AN OPINION OF COUNSEL SATISFACTORY TO THE COMPANY, AND ITS COUNSEL THAT THERE IS AN EFFECTIVE EXEMPTION FROM SUCH REGISTRATION. Warrant No. 111 HUMAN BIOSYSTEMS WARRANT TO PURCHASE SHARES OF COMMON STOCK Void after 5:00 p.m. Pacific Standard Time on May 6, 2005 FOR VALUE RECEIVED, Christine B. McCleary (the "Warrant Holder") is entitled to subscribe for and purchase, subject to the terms and conditions set forth in this Warrant, fifty thousand (50,000) shares of Common Stock ("Stock") of HUMAN BIOSYSTEMS, a California corporation (the "Company"). The exercise price of this warrant (the "Exercise Price") and purchase price of the Stock shall be $0.15 per share. 1. Conditions To Exercise This Warrant. Subject to the provisions and upon the terms and conditions herein set forth, this Warrant may be exercised in whole, or in part as set forth herein, at any time during the period ending at 5:00 p.m., Pacific Standard Time on February 1, 2005 (the "Warrant Termination Date"). In no event may this Warrant be exercised after the Warrant Termination Date. 2. Method of Exercise; Payment; Issuance of New Warrant. The purchase right represented by this Warrant may only be exercised by the registered holder hereof, in whole or in part as set forth herein, by the surrender of this Warrant (with the notice of exercise provision contained on the last page hereof duly executed) at the principal office of the Company, and by the payment to the Company, by check, cancellation of indebtedness, or both, of an amount equal to the Exercise Price per share multiplied by the number of shares then being purchased. Notwithstanding the terms hereof allowing partial exercise of this Warrant, in no event may this Warrant be exercised at any time for less than twenty-five percent (25%) of the number of shares for which this Warrant is originally exercisable. In the event of the partial exercise hereof, a replacement warrant in substantially the form hereof, but for the number of shares for which this Warrant is not exercised shall be delivered to the Warrant Holder within a reasonable period of time following such partial exercise. In the event of any exercise of this Warrant, certificates for the shares of Stock so purchased shall be delivered to the holder hereof as soon as practicable. Such exercise shall be deemed to have been made immediately prior to the close of business on the date of surrender of this Warrant. 3. Stock Fully Paid; Reservation of Shares. All shares of Stock which may be issued upon the exercise of this Warrant will, upon issuance, be duly authorized and validly issued, and fully paid and non-assessable, and free from all taxes, liens, and charges with respect to the issue thereof. During the period within which the rights represented by this Warrant may be exercised, the Company will use its best efforts to cause to be authorized, and thereafter at all times have authorized, and reserved for the purpose of the issue upon exercise of the purchase rights evidenced by this Warrant, a sufficient number of shares of its Stock to provide for the exercise of the rights represented by this Warrant. 4. Adjustments in Conversion Price. In the event the Company hereof shall fix a record date for any stock split, reverse split, combination or recapitalization or for the determination of holders of common stock entitled to receive a dividend or other distribution payable in additional shares of common stock or other securities or rights convertible into or entitling the holder thereof to receive directly or indirectly, additional shares of common stock ("Common Stock Equivalents") without payment of any consideration by such holder for the additional shares of common stock or Common Stock Equivalents, then, as of such record date, (or the date of such event if no record date is Fixed), the price per share of Common Stock for which this Warrant may be exercised shall be appropriately decreased or increased so that the number of shares of Common Stock issuable on exercise hereof shall be increased or decreased in proportion to such increase or decrease of outstanding shares, with any such Common Stock Equivalents evaluated on a full dilution, full conversion basis. The Company shall not, by amendment of its Certificate of Incorporation or through any reorganization, recapitalization, transfer of assets, consolidation, merger, dissolution, issue or sale of securities or other voluntary action, avoid or seek to avoid the observance or performance of any of the terms or provisions to be observed or performed under this provision. 5. Fractional Shares. No fractional shares of Stock will be issued in connection with any exercise hereunder, but in lieu of such fractional shares the Company shall make a cash payment therefor equal to the product of such fraction and the Exercise Price. 6. Compliance with Securities Laws; Disposition of Warrant and Shares of Common Stock. (a) Compliance With Securities Laws. The holder of this Warrant, by acceptance hereof, acknowledges that this Warrant and the shares of Stock to be issued upon exercise hereof are being acquired for investment purposes only and that such Holder will not offer, sell or otherwise dispose of this Warrant or any shares of Stock to be issued upon exercise hereof except under circumstances which will not result in a violation of the Securities Act of 1933, as amended (the "Act"), or any state securities laws. Upon exercise of this Warrant, the holder hereof shall, if requested by the Company, confirm in writing, in a form satisfactory to the Company, that the shares of Stock so purchased are being acquired for investment purposes only and not with a view toward distribution or resale. This Warrant and all shares of Stock issued upon exercise of this Warrant shall be stamped or imprinted with a legend therein setting forth substantially the following statement (in addition to any legend required by state securities laws): THE SECURITIES REPRESENTED HEREBY HAVE BEEN ACQUIRED FOR INVESTMENT PURPOSES ONLY AND HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"). SUCH SECURITIES AND ANY SECURITIES OR SHARES ISSUED HEREUNDER MAY NOT BE SOLD OR TRANSFERRED UNLESS A REGISTRATION STATEMENT UNDER THE ACT IS IN EFFECT AS TO SUCH SALE OR TRANSFER, OR IN THE OPINION OF COUNSEL ACCEPTABLE TO THE COMPANY, SUCH REGISTRATION IS UNNECESSARY, OR AN EXCEPTION THEREFROM IS AVAILABLE UNDER THE ACT. (b) Transfer of Warrant or Shares of Stock. Each certificate representing the shares of Stock issued hereunder shall bear a legend as to the restrictions on transferability in order to insure compliance with applicable securities laws unless, in the opinion of counsel for the Company, such legends are not required. The Company may issue stop transfer instructions to its transfer agent in connection with such restrictions. 7. "Market Stand Off" Agreement. The Warrant Holder agrees that, during that period of duration specified by the Company and an underwriter of common stock (or other securities) of the Company, following the effective date of a registration statement of the Company filed under the Securities Act of 1933, as amended, the Warrant Holder shall not, to the extent requested by the Company and such underwriter, directly or indirectly, offer to sell, contract to sell (including, without limitation, any short sale), grant any option to purchase or otherwise transfer or dispose of (other than to donees who agree to be similarly bound) any common stock of the Company held by Holder at any time during such period except common stock included in such registration, provided, however, that (a) such agreement shall be applicable only to the first such registration statement of the Company which covers common stock (or other securities) to be sold on its behalf to the public in an underwritten offering, and (b) all officers and directors of the Company and all persons with registration rights with respect to securities of the Company enter into similar agreements. In order to enforce the foregoing covenant, the Company may impose stop transfer instructions with respect to such common stock held by Holder until the end of such period. 8. Rights of Shareholders. This Warrant shall not entitle the Holder to be deemed the holder of stock or any other securities of the Company which may be issuable on the exercise hereof for any purpose, nor shall anything contained herein be construed to confer upon the holder of this Warrant, as such, any of the rights of a shareholder of the Company or any right to vote for the election of directors or upon any matter submitted to shareholders at any meeting thereof, or to give or withhold consent to any corporate action (whether upon any recapitalization, issuance of stock, reclassification of stock, consolidation, merger, conveyance, or otherwise) or to receive notice of meetings, or to receive dividends or subscription rights or otherwise until the Warrant shall have been exercised and the certificates representing the Shares purchasable upon the exercise hereof shall have been issued, as provided herein. HUMAN BIOSYSTEMS, a California corporation By:------------------------------- Harry Masuda, President & CEO May 6, 2003 NOTICE OF EXERCISE Warrant # 111 TO: HUMAN BIOSYSTEMS 1. The undersigned hereby elects to purchase -------------------- ( ) shares of Common Stock of HUMAN BIOSYSTEMS (the "Company") pursuant to the terms of the foregoing Warrant, Warrant numbered 111, and tenders herewith payment of the purchase price for such shares in full, together with all applicable transfer taxes, if any. 2. Please issue a certificate or certificates representing such securities in the name of the undersigned or in such other name as is specified below: -------------------------------- (Name) -------------------------------- -------------------------------- (Address) 3. The undersigned represents that the shares of Stock set forth above are being acquired for the account of the undersigned for investment purposes only and not with a view to, or for resale in connection with, the distribution thereof and that the undersigned has no present intention of distributing or reselling such shares. In support thereof, the undersigned agrees to execute an investment representation statement in a form reasonably requested by the Company as a condition to the exercise herein noticed. By: ---------------------- Authorized Signer Date: -------------------- EX-99.03 5 ex9902_13dmc.txt OPTION AGREEMENT EXHIBIT 99.02 HUMAN BIOSYSTEMS A California corporation THE COMMON STOCK REFERRED TO HEREIN HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), OR QUALIFIED UNDER THE CORPORATE SECURITIES LAWS OF THE STATE OF CALIFORNIA OR ANY OTHER STATE OR JURISDICTION. THE COMMON STOCK IS SOMETIMES REFERRED TO HEREIN AS THE "SECURITIES". THE SECURITIES MUST BE ACQUIRED FOR INVESTMENT PURPOSES AND NOT WITH A VIEW TO DISTRIBUTION OR RESALE, AND MAY NOT BE SOLD, MORTGAGED, PLEDGED, HYPOTHECATED, OR OTHERWISE TRANSFERRED WITHOUT REGISTRATION OF SUCH SECURITIES UNDER THE ACT UNLESS AN EXEMPTION FROM APPLICABLE FEDERAL AND STATE SECURITIES LAWS IS OR BECOMES AVAILABLE AND THE HOLDER OF THE SECURITIES PROVIDES TO HUMAN BIOSYSTEMS, PRIOR TO SUCH TRANSFER, AN OPINION OF COUNSEL, SATISFACTORY TO HUMAN BIOSYSTEMS AND ITS COUNSEL, THAT THE TRANSFER OF THE SECURITIES DOES NOT VIOLATE ANY APPLICABLE FEDERAL OR STATE SECURITIES LAWS. This Subscription Agreement is made by and between Human BioSystems, a California corporation (the "Company") and Christine B. McCleary the undersigned prospective purchaser who is subscribing hereby for the Securities. In consideration of the Company's agreement to accept the undersigned as a holder of Stock upon the terms and conditions set forth herein, the undersigned agrees and represents as follows: A. SUBSCRIPTION 1. By executing this Subscription Agreement ("Agreement"), the undersigned agrees to purchase an aggregate of 666,667 shares of on May 6, 2003 Common Stock for an aggregate purchase price of $100,000 or $0.15 per share, upon acceptance of this offer by the Company, and tenders payment in full herewith for such Securities (the "Payment"). 2. The Payment will be returned promptly, without interest, in the event that for any reason the purchase and sale of the Securities subscribed for hereby is not consummated within 30 days following the date this Subscription Agreement is duly executed and delivered by the undersigned (such date is hereinafter referred to as the Closing Date) or in the event that the undersigned's subscription is rejected. B. GENERAL REPRESENTATIONS AND WARRANTIES 1. The undersigned hereby represents and warrants to, and agrees with the Company, as follows: (a) The Securities are being purchased for his own account, for investment purposes only, and not for the account of any other person, and not with a view to distribution, assignment or resale to others or to fractionalization in whole or in part. The Securities are offered pursuant to exemptions provided by the Act and by exemptions set forth in certain state securities laws and certain rules and regulations promulgated pursuant thereto. In furtherance thereof, the undersigned represents, warrants, and agrees that no other person has or will have a direct or indirect beneficial interest in such Securities and the undersigned will not sell, hypothecate or otherwise transfer the Securities except in accordance with the Act and applicable state securities laws or unless, in the opinion of counsel for the Company, an exemption from the registration requirements of the Act and such laws is available. (b) Promptly after the acceptance of this offer by the Company, the Company will prepare and file with the Securities and Exchange Commission a registration statement on Form SB-2 (or such other form as may be available for use by the Company) for the registration for resale of the Securities, and will use its best efforts to cause such registration statement to be declared effective as soon as possible. (c) The undersigned has been furnished with and has carefully read and fully understands the contents of the Company's Business Plan (the "Plan") and the Annual and Quarterly Reports filed by the Company with the Securities and Exchange Commission (the "Reports"), and has read and fully understands the terms of this Agreement and any other agreement delivered in connection herewith, and acknowledges that any questions he may have had regarding the statements contained in the Plan, the Reports or the terms of this Agreement have been fully answered to his satisfaction. (d) In evaluating the suitability of an investment in the Company, the undersigned has not relied upon any representations or other information (whether oral or written) from the Company, or any of its agents other than as set forth in the Plan and, if applicable, written information from the Company provided in response to questions or requests for additional information and has not relied on any other representations, warranties or information (whether oral or otherwise) and no oral or written representations or warranties have been made or oral or written information furnished to the undersigned or his advisors, if any, in connection with the offering of the Securities which were in any way inconsistent with the Plan. (e) The undersigned has been given the opportunity to ask questions of the Company and to obtain any additional information from the Company which the undersigned and his purchaser representative, if any, deemed pertinent to this investment; any questions that were asked have been fully answered, and any information that was requested has been provided. (f) The undersigned recognizes the Company has only recently been organized and that it has limited financial or operating history and that investment in the Company involves substantial risks, and he has taken full cognizance of and understands all of the risk factors related to the purchase of the Securities. Accordingly, the undersigned represents that he fully understands that this is a highly speculative investment and that there are substantial risks that the undersigned will suffer a complete loss of his investment in the Securities. (g) The undersigned has carefully considered and has, to the extent he believes such discussion necessary, discussed with his professional legal, tax and financial advisers the suitability of an investment in the Company for his particular tax and financial situation and he has determined that the Securities are a suitable investment for him. (h) All information which the undersigned has previously provided to the Company concerning himself and his financial position and knowledge of financial, business and investment matters is correct and complete as of the date of the date hereof, and if there has been or is any change in such information prior to the acceptance of this subscription, he has or will immediately provide such information to the Company and will promptly send confirmation of such information to the Company. (i) The undersigned understands that the offering of the Securities has not been and will not be registered under the Act in reliance on the exemption for offerings provided by Section 4(2) of the Act and Rule 505 and certain other regulations promulgated thereunder and that the undersigned has no right to require such registration. The undersigned further understands that the offering of the Securities has not been and will not be qualified or registered under state securities laws in reliance upon exemptions under such laws for non public offerings, and, in part, in reliance upon the representations made and information furnished by the undersigned herein; and that neither the offering of the Securities, nor the Plan have been reviewed by the Securities and Exchange Commission or any state securities authorities. (j) The undersigned, or if the undersigned is an entity, the person making the investment decision on behalf of the entity, has the capacity, by reason of the undersigned's or such person's business or financial experience (or that of the undersigned's purchaser representative) to evaluate the merits and risks of an investment in the Securities and to protect the undersigned's own interests in connection with such investment and the undersigned is able to bear the economic risk of such investment. 2. The foregoing representations and warranties are true and accurate as of the date hereof, shall be true and accurate as of the date of the acceptance hereof by the Company and shall survive thereafter. If such representations and warranties shall not be true and accurate in any respect, the undersigned will, prior to such acceptance, give written notice of such fact to the Company specifying which representations and warranties are not true and accurate and the reasons therefor. 3. The undersigned shall indemnify and hold harmless the Company and any of its shareholders, officers, directors, employees, partners, counsel or agents who was or is a party or is threatened to be made a party to any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative, by reason of or arising from any actual or alleged misrepresentation or misstatement of facts or omission to represent or state facts made by the undersigned to the Company concerning himself or his financial position in connection with the offering or sale of the Securities which is not remedied by timely notice to the Company as provided above, against losses, liabilities and expenses for which the Company or any of its shareholders, officers, directors, employees, counsel or agents have not otherwise been reimbursed (including attorneys' fees, judgments, fines and amounts paid in settlement) as actually and reasonably incurred by such person or entity in connection with such action, suit or proceeding. C. INVESTOR INFORMATION The undersigned (if the undersigned is a natural person) or the individual making the investment decision for the undersigned (if the undersigned is a partnership, corporation, trust or other entity, (the "Subscribing Person") represents that the undersigned is an Accredited Investor within the definition in Rule 501 of Regulation D as promulgated under the Securities Act of 1933, as amended, and as set forth in the Plan. The undersigned also represents that the undersigned has no need for liquidity of the amount invested and the investment does not represent more than 10% of the undersigned's liquid net worth. In furnishing and, if necessary, updating the information provided to the Company, the undersigned acknowledges that the Company will be relying thereon in determining, among other things, whether there are reasonable grounds to believe that the undersigned qualifies as an accredited investor under exemptions provided by the Act and by certain state securities laws and certain rules and regulations promulgated pursuant thereto. D. UNDERSTANDINGS 1. The undersigned understands, acknowledges and agrees with the Company as follows: (a) This Subscription may be rejected, in whole or in part, by the Company in its sole discretion, at any time prior to the execution and delivery hereof by the Company, notwithstanding prior receipt by the undersigned of notice of acceptance of the undersigned's subscription. (b) This Subscription is and shall be irrevocable, except that the undersigned shall have no obligations hereunder in the event that: (i) this subscription is rejected for any reason or (ii) the purchase and sale of the Securities subscribed for hereby are not consummated. (c) No federal or state agency has made any finding or determination as to the fairness of this offering for investment, nor any recommendation or endorsement of the Securities. (d) There is no public market for the Securities or any other securities which the Company may offer and there is no certainty that such a market will ever develop. There can be no assurance that the undersigned will be able to sell or dispose of the Securities. Moreover, no assignment, sale, transfer, exchange or other disposition of the Securities can be made other than in accordance with all applicable securities laws. It is understood that in order not to jeopardize the offering's exempt status under the Act and under certain state securities laws, the transferee may at a minimum be required to fulfill investor suitability requirements. (e) The undersigned acknowledges that any financial illustrations, projections or forecasts provided to the undersigned in connection with this investment do not constitute predictions regarding future financial results of the Company or a return on an investment in the Securities, are based on a number of assumptions as to future events that may not occur or may occur differently than assumed, and that actual results will in all probability differ from the results illustrated and that such differences could be material. (f) The undersigned acknowledges that the information contained in the Plan is confidential and non public and agrees that all such information shall be kept in confidence by him and neither used by him to his personal benefit nor disclosed to any third party for any reason (other than in connection with his subscription for the Securities); provided, that this obligation shall not apply to any such information which: (i) is part of the public knowledge or literature and readily accessible at the date hereof; (ii) becomes part of the public knowledge or literature and readily accessible by publication (except as a result of a breach of these provisions); or (iii) is received from third parties (except third parties who disclose such information in violation of any confidentiality agreements including, without limitation, any Subscription Agreement they may have with the Company). (g) The undersigned has had prior personal or business relationships with the Company or its officers or directors or General Partners, or officers or directors or General Partners of the Company, or by reason of his business or financial experience, has the capacity to protect his own interest in connection with this transaction. (h) The undersigned acknowledges that the Company may pay a finder's fee of up to 12% (in cash and/or stock) to the finder of the investment made under this Agreement. Additional non-cash incentives such as stock grants, warrants or options may also be paid to finder of the investment made under this Agreement. 2. The representations, warranties, understandings, acknowledgments and agreements in this Agreement are true and accurate as of the date hereof, shall be true and accurate as of the date of the acceptance hereof by the Company and shall survive thereafter. E. MISCELLANEOUS 1. All pronouns and any variations thereof used herein shall be deemed to refer to the masculine, feminine, neuter, singular or plural as the identity of the person or persons may require. 2. Neither this Subscription Agreement nor any provisions hereof shall be waived, modified, changed, discharged, terminated, revoked or canceled except by an instrument in writing signed by the party against whom any such waiver, modification, change, discharge, termination, revocation or cancellation is sought. 3. Notices required or permitted to be given hereunder shall be in writing and shall be deemed to be sufficiently given when personally delivered or sent by registered mail, return receipt requested, addressed to the other party at the address of such party set forth herein, or to such other address furnished by notice given in accordance with this Article E. 4. Failure of the Company to exercise any right or remedy under this Subscription Agreement or any other agreement between the Company and the undersigned, or otherwise, or delay by the Company in exercising such right or remedy, shall not operate as a waiver thereof. No waiver by the Company shall be effective unless and until it is in writing and signed by the Company. 5. This Subscription Agreement shall be enforced, governed and construed in all respects in accordance with the laws of the State of California, as such laws are applied by California courts to agreements entered into and to be performed in California by and between residents of California, and shall be binding upon the undersigned, his heirs, estate, legal representatives, successors and assigns and shall inure to the benefit of the Company and its successors and assigns. 6. In the event that any provision of this Subscription Agreement is declared invalid or unenforceable by a court of competent jurisdiction under any applicable statute or rule of law, then such provision shall be deemed inoperative to the extent that it may conflict therewith and shall be deemed modified to conform with such statute or rule of law. Any provision hereof which may prove invalid or unenforceable under any law shall not affect the validity or enforceability of any other provision hereof. 7. This Subscription Agreement constitutes the entire agreement among the parties hereto with respect to the subject matter hereof and supersedes any and all prior or contemporaneous representations, warranties, agreements and understandings in connection therewith. This Subscription Agreement may be amended only by a writing executed by all parties hereto: 8. Title to the Securities shall be taken as follows: (check one): ( ) Husband and wife, as community property; ( ) Joint Tenants; ( ) Tenants in common; ( ) Separate property; ( ) Living Trust; ( ) Corporation (Attach copy of resolution authorizing this investment); ( ) Partnership (Attach copy of partnership agreement); ( ) Custodian,Trustee (Attach copy of agreement); ( ) Other: HUMAN BIOSYSTEMS SUBSCRIPTION AGREEMENT SIGNATURE PAGE This page constitutes the signature Page for the Subscription Agreement. The undersigned represents to you that (a) the information contained herein is complete and accurate on the date hereof and may be relied upon by you and (b) the undersigned will notify you immediately of any change in any of such information occurring prior to the acceptance of the subscription and will promptly send you written confirmation of such change. The undersigned hereby certifies that he has read and understands the Plan and this Subscription Agreement. IN WITNESS WHEREOF, the undersigned has executed this Subscription Agreement this 6th day of May , 2003 666,667 $100,000 ----------- ------------ Number of Shares of Common Stock Purchase Price Total Christine B McCleary - --------------------- NAME OF PURCHASER, Print or Type (as it is to appear on the stock certificate) - ------------- Signature xxxxxxxxxxxxxx - ---------------- Address Phone Numberxxxxxxxxxxx Social Security # or Federal ID #xxxxxxxx Fax Number xxxxxxxxxxxxxx Email Address Accepted on May 6, 2003 Title of AuthorizedSignature if Purchaser is a corporation, partnership or other entity - --------------------------------------------------------- For HumanBioSystems: - ------------------------------- Signature of Spouse or Co Owner Harry Masuda, President andChief Executive Officer - ----------------------------------- Social Security # of Spouse or Co Owner - ---------------------------------------- IF PURCHASER IS A CORPORATION, PARTNERSHIP OR OTHER ENTITY; A COPY OF THE BOARD OF DIRECTOR'S RESOLUTION AUTHORIZING THIS INVESTMENT; A COPY OF THE PARTNERSHIP AGREEMENT; OR IN THE CASE OF ANY OTHER ENTITY A COPY OF SUCH AGREEMENT AUTHORING THIS INVE EX-99.04 6 ex9903_13dmc.txt STOCK PURCHASE EXHIBIT 99.03 HUMAN BIOSYSTEMS STOCK OPTION AGREEMENT This Stock Option Agreement (the "Agreement"), by and between Human BioSystems, a California corporation (the "Company"), and Larry McCleary ("Optionee"), is made effective as of this 6th day of May 2003. RECITALS A. Pursuant to the Human BioSystems 2001 Stock Option Plan (the "Plan"), the Board of Directors of the Company (the "Board") has authorized the grant of an option to purchase common stock of the Company ("Common Stock") to Optionee, effective on the date indicated above, thereby allowing Optionee to acquire a proprietary interest in the Company in order that Optionee will have further incentive for continuing his or her employment by, and increasing his or her efforts on behalf of, the Company or an Affiliate of the Company. B. The Company desires to issue a stock option to Optionee and Optionee desires to accept such stock option on the terms and conditions set forth below. NOW THEREFORE, for good and valuable consideration, the receipt and adequacy of which are hereby acknowledged, the parties agree as follows: AGREEMENT 1. Option Grant. The Company hereby grants to the Optionee, as a separate incentive and not in lieu of any fees or other compensation for his or her services, an option to purchase, on the terms and conditions hereinafter set forth, all or any part of an aggregate of thirty thousand (30,000) shares of authorized but unissued shares of Common Stock, at the Purchase Price set forth in paragraph 2 of this Agreement. 2. Purchase Price. The Purchase Price per share (the "Option Price") shall be $0.15, which is the fair market value per share of Common Stock on the date hereof. The Option Price shall be payable in the manner provided in paragraph 9 below. 3. Adjustment. The number and class of shares specified in paragraph 1 above, and the Option Price, are subject to appropriate adjustment in the event of certain changes in the capital structure of the Company such as stock splits, recapitalizations and other events which alter the per share value of Common Stock or the rights of holders thereof. In connection with (i) any merger, consolidation, acquisition, separation, or reorganization in which more than fifty percent (50%) of the shares of the Company outstanding immediately before such event are converted into cash or into another security, (ii) any dissolution or liquidation of the Company or any partial liquidation involving fifty percent (50%) or more of the assets of the Company, (iii) any sale of more than fifty percent (50%) of the Company's assets, or (iv) any like occurrence in which the Company is involved, the Company may, in its absolute discretion, do one or more of the following upon ten days' prior written notice to the Optionee: (a) accelerate any vesting schedule to which this option is subject; (b) cancel this option upon payment to the Optionee in cash, to the extent this option is then exercisable, of any amount which, in the absolute discretion of the Company, is determined to be equivalent to any excess of the market value (at the effective time of such event) of the consideration that the Optionee would have received if this option had been exercised before the effective time over the Option Price; (c) shorten the period during which this option is exercisable (provided that this option shall remain exercisable, to the extent otherwise exercisable, for at least ten (10) days after the date the notice is given); or (d) arrange that new option rights be substituted for the option rights granted under this option, or that the Company's obligations under this option be assumed, by an employer corporation other than the Company or by a parent or subsidiary of such employer corporation. The actions described in this paragraph 3 may be taken without regard to any resulting tax consequence to the Optionee. 4. Option Exercise. Commencing on the date of this Agreement the right to exercise this option should be 50% vested after one year and 100% vested after 2 years. Shares entitled to be, but not, purchased as of any accrual date may be purchased at any subsequent time, subject to paragraphs 5 and 6 below. The number of shares which may be purchased as of any such anniversary date will be rounded up to the nearest whole number. No partial exercise of the option may be for an aggregate exercise price of less than One Hundred Dollars ($100). In order to exercise any part of this option, Optionee must agree to be bound by that certain Shareholder Agreement by and among the Company's shareholders. 4(i) Early Exercise. Subject to the conditions of this Section 4, Optionee may elect during such time as Optionee is employed by the Company, to exercise such Options or part thereof, prior to such time as the Options are vested as set forth above, provided however, (a) a partial exercise shall be deemed to cover vested shares of Common Stock first and then the earliest installment of unvested shares of Common Stock; (b) any Common Stock purchased shall be subject to the repurchase right as set forth below if applicable as Advisory Board Member. Any shares issued pursuant to an exercise of an option hereunder shall contain the following legend condition in addition to any other applicable legend condition: THE SHARES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO REPURCHASE PROVISIONS IN ACCORDANCE WITH THE TERMS OF AN AGREEMENT BETWEEN THE COMPANY AND THE SHAREHOLDER, A COPY OF WHICH IS ON FILE AT THE PRINCIPAL OFFICE OF THE COMPANY. 5. Termination of Option. The right to exercise this option will lapse five years (5) from the date of this agreement. Notwithstanding any other provision of this Agreement, this option may not be exercised after, and will completely expire on, the close of business on the fifth (5th) year after the effective date of this Agreement, unless terminated sooner pursuant to paragraph 6 below. 6. Termination of Employment. In the event of termination of Optionee's employment with the Company for any reason, this option will terminate immediately upon the date of the termination of Optionee's employment, unless terminated earlier pursuant to paragraph 5 above. However, (i) if termination is due to the death of Optionee, the Optionee's estate or a legal representative thereof, may at any time within and including three (3) months after the date of death of Optionee, exercise the option to the extent it was exercisable at the date of termination; or (ii) if termination is due to Optionee's "disability" (as determined in accordance with Section 22(e)(3) of the Internal Revenue Code), Optionee may, at any time, within six (6) months following the date of this Agreement, exercise the option to the extent it was exercisable at the date of termination. If the Optionee or his or her legal representative fails to exercise the option within the time periods specified in this paragraph 6, the option shall expire. The Optionee or his or her legal representative may, on or before the close of business on the earlier of the date for exercise set forth in paragraph 5 or the dates specified in paragraph 4 above, exercise the option only to the extent Optionee could have exercised the option on the date of such termination of employment pursuant to paragraphs 4 and 5 above. 7. Repurchase Option of Company. Notwithstanding anything to the contrary contained in this Agreement, pursuant to Section 6.1.8 of the Plan, in the event of termination of Optionee's employment with the Company for any reason, the Company shall have an option to repurchase ("Repurchase Option") any Common Stock owned by the Optionee or his or her heirs, legal representatives, successors or assigns at the time of termination, or acquired thereafter by any of them at any time, by way of an option granted hereunder. The Repurchase Option must be exercised, if at all, by the Company within ninety (90) days after the date of termination upon notice ("Repurchase Notice") to the Optionee or his or her heirs, legal representatives, successors or assigns, in conformance with paragraph 13 below. If the shares of the Company are publicly trade over an exchange such as NASDAQ, NYSE or OTC Bulletin Board, the purchase price to be paid for the shares subject to the Repurchase Option shall be the average trading price for the shares of common stock of the Company over a thirty (30) day period prior to the delivery of the Repurchase Notice. If the shares of the Company are not publicly traded, the purchase price shall be the fair market value of the shares as determined by good faith judgment of the Board of Directors. Any shares issued pursuant to an exercise of an option hereunder shall contain the following legend condition in addition to any other applicable legend condition: THE SHARES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO REPURCHASE PROVISIONS IN ACCORDANCE WITH THE TERMS OF AN AGREEMENT BETWEEN THE COMPANY AND THE SHAREHOLDER, A COPY OF WHICH IS ON FILE AT THE PRINCIPAL OFFICE OF THE COMPANY. 8. Transferability. This option will be exercisable during Optionee's lifetime only by Optionee. Except as otherwise set forth in the Plan, this option will be non-transferable. 9. Method of Exercise. Subject to paragraph 10 below, this option may be exercised by the person then entitled to do so as to any shares which may then be purchased by delivering to the Company an exercise notice in the form attached hereto as Exhibit A and: (a) full payment of the Option Price thereof (and the amount of any tax the Company is required by law to withhold by reason of such exercise) in the form of: (i) cash or readily available funds; or (ii) delivery of a secured promissory note (the "Note") in a form satisfactory to the Company; (iii) a written request to Net Exercise, as defined in this paragraph 9(a)(iii). In lieu of exercising this Option via cash payment or promissory note, Optionee may elect to receive shares equal to the value of this Option (or portion thereof being canceled) by surrender of Options at the principal office of the Company together with notice of election to exercise by means of a Net Exercise in which event the Company shall issue to Optionee a number of shares of the Company computed using the following formula: X = Y (A-B)/ A where X is the number of shares of stock to be issued to Optionee; Y is the number of shares purchasable under this Option; A is the fair market value of the stock determined in accordance with Section 6.1.12 of the Plan; and B is the Option Price as adjusted to the date of such calculation. (b) payment of any withholding or employment taxes, if any. The Company will issue a certificate representing the shares so purchased within a reasonable time after its receipt of such notice of exercise, payment of the Option Price and withholding or employment taxes, and execution of any other appropriate documentation, with appropriate certificate legends. 10. Securities Laws. The issuance of shares of Common Stock upon the exercise of the option will be subject to compliance by the Company and the person exercising the option with all applicable requirements of federal and state securities and other laws relating thereto. No person may exercise the option at any time when, in the opinion of counsel to the Company, such exercise is permitted under applicable federal or state securities laws. Nothing herein will be construed to require the Company to register or qualify any securities under applicable federal or state securities laws, or take any action to secure an exemption from such registration and qualification for the issuance of any securities upon the exercise of this option. 11. No Rights as Shareholder. Neither Optionee nor any person claiming under or through Optionee will be, or have any of the rights or privileges of, a shareholder of the Company in respect of any of the shares issuable upon the exercise of the option, unless and until this option is properly and lawfully exercised. 12. No Right to Continued Employment. Nothing in this Agreement will be construed as granting Optionee any right to continued employment. EXCEPT AS THE COMPANY AND OPTIONEE WILL HAVE OTHERWISE AGREED IN WRITING, OPTIONEE'S EMPLOYMENT WILL BE TERMINABLE BY THE COMPANY, AT WILL, WITH OR WITHOUT CAUSE FOR ANY REASON OR NO REASON. Except as otherwise provided in the Plan, the Board in its sole discretion will determine whether any leave of absence or interruption in service (including an interruption during military service) will be deemed a termination of employment for the purpose of this Agreement. 13. Notices. Any notice to be given to the Company under the terms of this Agreement will be addressed to the Company, in care of its Secretary, at its executive offices, or at such other address as the Company may hereafter designate in writing. Any notice to be given to Optionee will be in writing and delivered or mailed by registered or certified mail, return receipt requested, postage prepaid, addressed to Optionee at the address set forth beneath Optionee's signature in writing. Any such notice will be deemed to have been duly given where deposited in a United States post office in compliance with the foregoing. 14. Non-Transferrable. Except as otherwise provided in the Plan or in this Agreement, the option herein granted and the rights and privileges conferred hereby will not be transferred, assigned, pledged or hypothecated in any way (whether by operation of law or otherwise). Upon any attempt to transfer, assign, pledge, hypothecate or otherwise dispose of this option, or of any right or upon any attempted sale under any execution, attachment or similar process upon the rights and privileges conferred hereby, this option will immediately become null and void. 15. Successor. Subject to the limitation on the transferability of the option contained herein, this Agreement will be binding upon and inure to the benefit of the heirs, legal representatives, successors and assigns of the parties hereto. 16. California Law. This Agreement will be governed by and construed in accordance with the laws of the State of California. 17. Type of Option. The option granted in this Agreement: [ ] Is intended to be an Incentive Stock Option ("ISO") within the meaning of Section 422 of the Internal Revenue Code of 1986, as amended. [X] Is a non-qualified Option and is not intended to be an ISO. 18. Plan Provisions Incorporated by Reference. A copy of the Plan is attached hereto as Exhibit B and incorporated herein by this reference. In the case of conflict between any provision in this Agreement and any provision in the Plan or that certain Shareholder Agreement by and among the Company's shareholders, the terms of this Agreement shall prevail. In the case of conflict between any provision in the Plan and a provision in the Shareholder Agreement, the terms of the Shareholder Agreement shall prevail. 19. Term. Capitalized terms used herein, except as otherwise indicated, shall have the same meaning as those terms have under the Plan. IN WITNESS WHEREOF, the parties have executed this Agreement as of the day and year written above. COMPANY: HUMAN BIOSYSTEMS a California corporation By: Harry Masuda, President OPTIONEE: Larry McCleary (signature) Golden, CO 80401 SSN: EXHIBIT A HUMAN BIOSYSTEMS 2001 STOCK OPTION PLAN EXERCISE NOTICE 1127 Harker Avenue Palo Alto, California 94301 Attention: Secretary 1. Exercise of Option. Effective as of today,---------------, the undersigned ("Purchaser") hereby elects to purchase --------------( ) shares (the "Shares") of the Common Stock of Human BioSystems. (the "Company") under and pursuant to the Human BioSystems, 2001 Stock Option Plan (the "Plan") and the Stock Option Agreement dated------------, 2001 (the "Option Agreement"). The purchase price for the Shares shall be ------------($ ), as required by the Option Agreement. 2. Delivery of Payment. Purchaser herewith delivers to the Company the full purchase price for the Shares in the form of: [ ] Cash or readily available funds; [ ] Promissory Note and Security Agreement; [ ] Formal Request to Net Exercise; 3. Representations of Purchaser. Purchaser acknowledges that Purchaser has received, read and understood the Plan and the Option Agreement and agrees to abide by and be bound by their terms and conditions. 4. Rights as Stockholder. Until the issuance (as evidenced by the appropriate entry on the books of the Company or of a duly authorized transfer agent of the Company) of the Shares, no right to vote or receive dividends or any other rights as a stockholder shall exist with respect to the Option, notwithstanding the exercise of the Option. The Shares so acquired shall be issued to the Optionee as soon as practicable after exercise of the Option. No adjustment will be made for a dividend or other right for which the record date is prior to the date of issuance, except as provided in the Plan. 5. Tax Consultation. Purchaser understands that Purchaser may suffer adverse tax consequences as a result of Purchaser's purchase or disposition of the Shares. Purchaser represents that Purchaser has consulted with any tax consultants Purchaser deems advisable in connection with the purchase or disposition of the Shares and that Purchaser is not relying on the Company for any tax advice. 6 Tax Impact. If the Company is an S-Corporation, purchaser hereby agrees to be treated as a shareholder of a S-Corporation and to complete such documents as may be necessary to evidence such treatment. 7. Entire Agreement; Governing Law. The Plan and Option Agreement are incorporated herein by reference. This Agreement, the Plan and the Option Agreement constitute the entire agreement of the parties with respect to the subject matter hereof and supersede in their entirety all prior undertakings and agreements of the Company and Purchaser with respect to the subject matter hereof, and may not be modified adversely to the Purchaser's interest except by means of a writing signed by the Company and Purchaser. This agreement is governed by the law of the State of California. Submitted by: Accepted by: PURCHASER: HUMAN BIOSYSTEMS By Signature Its Print Name Address: Date Received: EX-99.05 7 ex9905_13dmc.txt SUBSCRIPTION AGREEMENT EXHIBIT 99.05 HYPERBARIC SYSTEMS A California corporation THE COMMON STOCK (THE "STOCK") REFERRED TO HEREIN HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), OR QUALIFIED UNDER THE CORPORATE SECURITIES LAWS OF THE STATE OF CALIFORNIA OR ANY OTHER STATE OR JURISDICTION. THE STOCK IS SOMETIMES REFERRED TO HEREIN AS THE "SECURITIES". THE SECURITIES MUST BE ACQUIRED FOR INVESTMENT PURPOSES AND NOT WITH A VIEW TO DISTRIBUTION OR RESALE, AND MAY NOT BE SOLD, MORTGAGED, PLEDGED, HYPOTHECATED, OR OTHERWISE TRANSFERRED WITHOUT REGISTRATION OF SUCH SECURITIES UNDER THE ACT UNLESS AN EXEMPTION FROM APPLICABLE FEDERAL AND STATE SECURITIES LAWS IS OR BECOMES AVAILABLE AND THE HOLDER OF THE SECURITIES PROVIDES TO HYPERBARIC SYSTEMS, PRIOR TO SUCH TRANSFER, AN OPINION OF COUNSEL, SATISFACTORY TO HYPERBARIC SYSTEMS AND ITS COUNSEL, THAT THE TRANSFER OF THE SECURITIES DOES NOT VIOLATE ANY APPLICABLE FEDERAL OR STATE SECURITIES LAWS. This Subscription Agreement is made by and between HyperBaric Systems, a California corporation (the "Company") and the undersigned prospective purchaser who is subscribing hereby for the Securities. In consideration of the Company's agreement to accept the undersigned as a holder of Stock upon the terms and conditions set forth herein, the undersigned agrees and represents as follows: A. SUBSCRIPTION 1. By executing this Subscription Agreement ("Agreement"), the undersigned agrees to purchase that number of shares of Stock as is set forth on the signature page hereof, upon acceptance of this offer by the Company, and tenders payment in full herewith for such Securities (the "Payment"). 2. The Payment will be returned promptly, without interest, in the event that for any reason the purchase and sale of the Securities subscribed for hereby is not consummated within 30 days following the date this Subscription Agreement is duly executed and delivered by the undersigned (such date is hereinafter referred to as the Closing Date) or in the event that the undersigned's subscription is rejected. B. GENERAL REPRESENTATIONS AND WARRANTIES 1. The undersigned hereby represents and warrants to, and agrees with the Company, as follows: (a) The Securities are being purchased for his own account, for investment purposes only, and not for the account of any other person, and not with a view to distribution, assignment or resale to others or to fractionalization in whole or in part. The Securities are offered pursuant to exemptions provided by the Act and by exemptions set forth in certain state securities laws and certain rules and regulations promulgated pursuant thereto. In furtherance thereof, the undersigned represents, warrants, and agrees as follows: (i) no other person has or will have a direct or indirect beneficial interest in such Securities and the undersigned will not sell, hypothecate or otherwise transfer the Securities except in accordance with the Act and applicable state securities laws or unless, in the opinion of counsel for the Company, an exemption from the registration requirements of the Act and such laws is available; and (ii) the Company is under no obligation to register the Securities on behalf of the undersigned or to assist him in complying with any exemption from registration. (b) The undersigned has been furnished with and has carefully read and fully understands the contents of the Company's Business Plan (the "Plan") and has read and fully understands the terms of this Agreement and any other agreement delivered in connection herewith, and acknowledges that any questions he may have had regarding the statements contained in the Plan or the terms of this Agreement have been fully answered to his satisfaction. (c) In evaluating the suitability of an investment in the Company, the undersigned has not relied upon any representations or other information (whether oral or written) from the Company, or any of its agents other than as set forth in the Plan and, if applicable, written information from the Company provided in response to questions or requests for additional information and has not relied on any other representations, warranties or information (whether oral or otherwise) and no oral or written representations or warranties have been made or oral or written information furnished to the undersigned or his advisors, if any, in connection with the offering of the Securities which were in any way inconsistent with the Plan. (d) The undersigned has been given the opportunity to ask questions of the Company and to obtain any additional information from the Company which the undersigned and his purchaser representative, if any, deemed pertinent to this investment; any questions that were asked have been fully answered, and any information that was requested has been provided. (e) The undersigned recognizes the Company has only recently been organized and that it has limited financial or operating history and that investment in the Company involves substantial risks, and he has taken full cognizance of and understands all of the risk factors related to the purchase of the Securities. Accordingly, the undersigned represents that he fully understands that this is a highly speculative investment and that there are substantial risks that the undersigned will suffer a complete loss of his investment in the Securities. (f) The undersigned has carefully considered and has, to the extent he believes such discussion necessary, discussed with his professional legal, tax and financial advisers the suitability of an investment in the Company for his particular tax and financial situation and he has determined that the Securities are a suitable investment for him. (g) All information which the undersigned has previously provided to the Company concerning himself and his financial position and knowledge of financial, business and investment matters is correct and complete as of the date of the date hereof, and if there has been or is any change in such information prior to the acceptance of this subscription, he has or will immediately provide such information to the Company and will promptly send confirmation of such information to the Company. (h) The undersigned understands that the offering of the Securities has not been and will not be registered under the Act in reliance on the exemption for offerings provided by Section 4(2) of the Act and Rule 505 and certain other regulations promulgated thereunder and that the undersigned has no right to require such registration. The undersigned further understands that the offering of the Securities has not been and will not be qualified or registered under state securities laws in reliance upon exemptions under such laws for non public offerings, and, in part, in reliance upon the representations made and information furnished by the undersigned herein; and that neither the offering of the Securities, nor the Plan have been reviewed by the Securities and Exchange Commission or any state securities authorities. (i) The undersigned, or if the undersigned is an entity, the person making the investment decision on behalf of the entity, has the capacity, by reason of the undersigned's or such person's business or financial experience (or that of the undersigned's purchaser representative) to evaluate the merits and risks of an investment in the Securities and to protect the undersigned's own interests in connection with such investment and the undersigned is able to bear the economic risk of such investment. 2. The foregoing representations and warranties are true and accurate as of the date hereof, shall be true and accurate as of the date of the acceptance hereof by the Company and shall survive thereafter. If such representations and warranties shall not be true and accurate in any respect, the undersigned will, prior to such acceptance, give written notice of such fact to the Company specifying which representations and warranties are not true and accurate and the reasons therefor. 3. The undersigned shall indemnify and hold harmless the Company and any of its shareholders, officers, directors, employees, partners, counsel or agents who was or is a party or is threatened to be made a party to any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative, by reason of or arising from any actual or alleged misrepresentation or misstatement of facts or omission to represent or state facts made by the undersigned to the Company concerning himself or his financial position in connection with the offering or sale of the Securities which is not remedied by timely notice to the Company as provided above, against losses, liabilities and expenses for which the Company or any of its shareholders, officers, directors, employees, counsel or agents have not otherwise been reimbursed (including attorneys' fees, judgments, fines and amounts paid in settlement) as actually and reasonably incurred by such person or entity in connection with such action, suit or proceeding. C. INVESTOR INFORMATION The undersigned (if the undersigned is a natural person) or the individual making the investment decision for the undersigned (if the undersigned is a partnership, corporation, trust or other entity, (the "Subscribing Person") represents that the undersigned is an Accredited Investor within the definition in Rule 501 of Regulation D as promulgated under the Securities Act of 1933, as amended, and as set forth in the Plan. The undersigned also represents that the undersigned has no need for liquidity of the amount invested and the investment does not represent more than 10% of the undersigned?s liquid net worth. In furnishing and, if necessary, updating the information provided to the Company, I acknowledge that the Company will be relying thereon in determining, among other things, whether there are reasonable grounds to believe that I qualify as a purchaser under exemptions provided by the Act and by certain state securities laws and certain rules and regulations promulgated pursuant thereto. D. UNDERSTANDINGS 1. The undersigned understands, acknowledges and agrees with the Company as follows: (a) This Subscription may be rejected, in whole or in part, by the Company in its sole discretion, at any time prior to the execution and delivery hereof by the Company, notwithstanding prior receipt by the undersigned of notice of acceptance of the undersigned's subscription. (b) This Subscription is and shall be irrevocable, except that the undersigned shall have no obligations hereunder in the event that: (i) this subscription is rejected for any reason or (ii) the purchase and sale of the Securities subscribed for hereby are not consummated. (c) No federal or state agency has made any finding or determination as to the fairness of this offering for investment, nor any recommendation or endorsement of the Securities. (d) There is no public market for the Securities or any other securities which the Company may offer and there is no certainty that such a market will ever develop. There can be no assurance that the undersigned will be able to sell or dispose of the Securities. Moreover, no assignment, sale, transfer, exchange or other disposition of the Securities can be made other than in accordance with all applicable securities laws. It is understood that in order not to jeopardize the offering?s exempt status under the Act and under certain state securities laws, the transferee may at a minimum be required to fulfill investor suitability requirements. (e) The undersigned acknowledges that any financial illustrations, projections or forecasts provided to the undersigned in connection with this investment do not constitute predictions regarding future financial results of the Company or a return on an investment in the Securities, are based on a number of assumptions as to future events that may not occur or may occur differently than assumed, and that actual results will in all probability differ from the results illustrated and that such differences could be material. (f) The undersigned acknowledges that the information contained in the Plan is confidential and non public and agrees that all such information shall be kept in confidence by him and neither used by him to his personal benefit nor disclosed to any third party for any reason (other than in connection with his subscription for the Securities); provided, that this obligation shall not apply to any such information which: (i) is part of the public knowledge or literature and readily accessible at the date hereof; (ii) becomes part of the public knowledge or literature and readily accessible by publication (except as a result of a breach of these provisions); or (iii) is received from third parties (except third parties who disclose such information in violation of any confidentiality agreements including, without limitation, any Subscription Agreement they may have with the Company). (g) The undersigned has had prior personal or business relationships with the Company or its officers or directors or General Partners, or officers or directors or General Partners of the Company, or by reason of his business or financial experience, has the capacity to protect his own interest in connection with this transaction. (h) The undersigned acknowledges that the Company may pay a finder's fee of up to 12% and an additional due diligence fee and other incentives and bonuses of up to 6% to finder of the investment made under this Agreement. Additional non-cash incentives such as stock grants, warrants or options may also be paid to finder of the investment made under this Agreement. 2. The representations, warranties, understandings, acknowledgments and agreements in this Agreement are true and accurate as of the date hereof, shall be true and accurate as of the date of the acceptance hereof by the Company and shall survive thereafter. E. MISCELLANEOUS 1. All pronouns and any variations thereof used herein shall be deemed to refer to the masculine, feminine, neuter, singular or plural as the identity of the person or persons may require. 2. Neither this Subscription Agreement nor any provisions hereof shall be waived, modified, changed, discharged, terminated, revoked or canceled except by an instrument in writing signed by the party against whom any such waiver, modification, change, discharge, termination, revocation or cancellation is sought. 3. Notices required or permitted to be given hereunder shall be in writing and shall be deemed to be sufficiently given when personally delivered or sent by registered mail, return receipt requested, addressed to the other party at the address of such party set forth herein, or to such other address furnished by notice given in accordance with this Article E. 4. Failure of the Company to exercise any right or remedy under this Subscription Agreement or any other agreement between the Company and the undersigned, or otherwise, or delay by the Company in exercising such right or remedy, shall not operate as a waiver thereof. No waiver by the Company shall be effective unless and until it is in writing and signed by the Company. 5. This Subscription Agreement shall be enforced, governed and construed in all respects in accordance with the laws of the State of California, as such laws are applied by California courts to agreements entered into and to be performed in California by and between residents of California, and shall be binding upon the undersigned, his heirs, estate, legal representatives, successors and assigns and shall inure to the benefit of the Company and its successors and assigns. 6. In the event that any provision of this Subscription Agreement is declared invalid or unenforceable by a court of competent jurisdiction under any applicable statute or rule of law, then such provision shall be deemed inoperative to the extent that it may conflict therewith and shall be deemed modified to conform with such statute or rule of law. Any provision hereof which may prove invalid or unenforceable under any law shall not affect the validity or enforceability of any other provision hereof. 7. This Subscription Agreement constitutes the entire agreement among the parties hereto with respect to the subject matter hereof and supersedes any and all prior or contemporaneous representations, warranties, agreements and understandings in connection therewith. This Subscription Agreement may be amended only by a writing executed by all parties hereto: 8. Title to the Securities shall be taken as follows: (check one): ( ) Husband and wife, as community property; ( ) Joint Tenants; ( ) Tenants in common; ( ) Separate property; ( ) Living Trust; ( ) Corporation (Attach copy of resolution authorizing this investment); ( ) Partnership (Attach copy of partnership agreement); ( ) Custodian, Trustee (Attach copy of agreement); ( ) Other: HYPERBARIC SYSTEMS SUBSCRIPTION AGREEMENT SIGNATURE PAGE This page constitutes the signature Page for the Subscription Agreement. The undersigned represents to you that (a) the information contained herein is complete and accurate on the date hereof and may be relied upon by you and (b) the undersigned will notify you immediately of any change in any of such information occurring prior to the acceptance of the subscription and will promptly send you written confirmation of such change. The undersigned hereby certifies that he has read and understands the Plan and this Subscription Agreement. IN WITNESS WHEREOF, the undersigned has executed this Subscription Agreement this 15th day of January , 2001 51,851 $21,000 - ---------- ------------- Number of Shares of Common Stock Total Purchase Price NAME OF PURCHASER, Edward Larry McCleary - ------------------------ Print or Type (as it is to appear on the stock certificate) Note: Apply promissory note to purchase - ------------------------ Signature XXXXXXXXXXXXXXXXXXX Address of Purchaser xxxxxxxxxxxx phone Number xxxxxxxxxxx Fax Number xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx Social Security # or Federal ID # Accepted on January 15th, 2001 For HyperBaric Systems: Harry Masuda, President and CEO IF PURCHASER IS A CORPORATION, PARTNERSHIP OR OTHER ENTITY; A COPY OF THE BOARD OF DIRECTOR'S RESOLUTION AUTHORIZING THIS INVESTMENT; A COPY OF THE PARTNERSHIP AGREEMENT; OR IN THE CASE OF ANY OTHER ENTITY A COPY OF SUCH AGREEMENT AUTHORIZING THIS INVESTMENT MUST BE ATTACHED. -----END PRIVACY-ENHANCED MESSAGE-----