Sanguine Corporation

                       SERVICE AGREEMENT

      THIS SERVICES AGREEMENT is effective as of the latest signature date
    by and between IriSys Research and Development LLC (hereinafter
    "Contractor"), with its principal place of business at 6190
    Cornerstone Court East, Suite 106, San Diego, CA 92121-4701 and
    Sanguine Corporation (hereinafter "Company") with its principal place
    of business at 101 East Green Street, Suite 11, Pasadena, California
    91105.

                             RECITALS

           A. Sanguine Corporation is a public company (OTC BB: SGNC)
    whose primary focus is the development of perfluorocarbon emulsions as
    synthetic substitutes for human red blood cells with broad-based
    medical applications.  The Company has the resources necessary to
    obtain product approval through FDA "fast track" approval, and capture
    a significant share of the global human blood market.

         Sanguine has a well-defined organization with leaders in the
    field of synthetic blood chemistry and development including Dr.
    Thomas C. Drees, who played a key role in the creation of Fluosol, the
    only synthetic blood product ever approved for human use by the United
    States Food and Drug Administration (FDA).  Sanguine's management is
    supported by recognized experts in the various fields of medicine
    necessary for the development of viable products.  PHER-O2 is
    Sanguine's 2nd generation Red Blood Cell (RBC) substitute product.
    Sanguine management has an impressive record of success in medical and
    pharmaceutical development and the ability to accelerate PHER-O2product
    development, test and FDA approval.

           B. Contractor has expertise in preformulation development,
    analytical chemistry and stability protocol design and testing
    including preparation of regulatory reports required for new drug
    applications and knowledge of regulatory standards required to achieve
    regulatory compliance.

           C. Sanguine has requested that Contractor perform the
    services described in Attachment 1 to the Agreement.

           D. Contractor desires to provide services to Sanguine on the
    terms and conditions set forth in this Agreement

    NOW THEREFORE, in consideration of the mutual covenants contained in
    this Agreement, the parties, intending to be legally bound, agree as
    follows.
<PAGE>
                            ARTICLE I

                   BASIC OBLIGATIONS OF THE PARTIES

    Section 1.1  The Contractor shall use commercially reasonable efforts to
             perform the work stated in the Statement of Work at Attachment
             l.

    Section 1.2  Independent Contractor.  Contractor shall perform all
            work under this Agreement as an independent contractor.
            Contractor is not an employee, legal partner,
            representative, or joint venturer of or with Sanguine, and
            nothing in this Agreement shall be construed to create such
            a relationship.  Neither party shall have the power or right
            to bind or obligate the other.

    Section 1.3  Scope of Work.  Contractor agrees to provide Sanguine
            with product development contract services to develop an
            effective emulsification of perfluorodecalin, using
            fluorosurfactants, as a red blood cell substitute that
            carries oxygen and carbon dioxide from the lungs.

    Section 1.4  Furnished Materials.  Sanguine will provide the materials
            listed in Enclosure 1 to Attachment 1 in a timely manner to
            allow for completion of the work in accordance with the
            performance schedule.  Furnished materials will be provided
            to Contractor on a no cost basis.

    Section 1.5  Period of Performance.  The work under this Agreement
             shall begin immediately after contract award and be
             completed in accordance with the schedule in Section 1.6.

    Section 1.6  Deliverables and Schedule.  Contractor deliverables and
             schedule:

         DELIVERABLE                             DATE

         1.  Preformulation analysis and recommendations        Week 3

         2.  Test Plan for preliminary formulations
             including criteria for droplet size, stability
             (product half-life, shelf life, and
             sterilization), and toxicity.                      Week 3

         3.  Progress Report                                    Week 7

         4.  Progress Report                                    Week 11
<PAGE>
         5.  Results and recommendations of small-scale
             experimental formulation studies                   Week 15

         6.  4 liters of candidate emulsion for animal testing  Week 17

         7.  Product development report (for use in regulatory
             Filing)                                            Week 20

       Section 1.7  Review and Acceptance.  Sanguine will review the
       Contractor's deliverables and provide notification regarding
       acceptability within five (5) working days of receipt.

                            ARTICLE II

                        PRICE AND PAYMENT

       Section 2.1  Price.  The price for performance of the work
       (Attachment l) is Firm Fixed Price.

       Section 2.2 Expenses.  All costs identified as of the effective
       date of this Agreement for performance of this effort are included
       in the price shown in Section 2.1.  Should unforeseen expenses
       arise during performance of this Agreement, Sanguine shall be
       immediately notified of the circumstance and expense.  Sanguine
       will review this information and consider amending the Agreement if
       warranted.

       Section 2.3  Payment.  Payments will be made to Contractor in
       accordance with the following schedule:

            A. Contract award                         15%
            B. Deliverable # 1 & 2                    15%
            C. Deliverable # 3                        15%
            D. Deliverable # 4                        15%
            E. Deliverable # 5                        15%
            F  Deliverable # 6                        15%
            G. Deliverable # 7                        10%

                             ARTICLE III

                            MISCELLANEOUS

       Section 3.1  Notices.  Notices under this Agreement shall be in
       writing and delivered either personally or by registered or
       certified mail or prepaid overnight courier to the following
       individuals:
<PAGE>
              Contractor:                    Sanguine Corporation:

         Ms. Gina Stack                     Thomas C. Drees, Ph.D.
         6190 Cornerstone Court East        101 East Green St
         Suite 106                          Suite 11
         San Diego, CA 92121-4701           Pasadena, CA 91105

       Section 3.2  Force Majeure.  If performance of any part of this
       Agreement by either party is prevented, restricted, interfered with
       or delayed by reason beyond the reasonable control of the party
       liable to perform, the party so affected shall, upon written notice
       to the other party, be excused from performance to the extent of
       the prevention, restriction, interference or delay.  When such
       circumstances arise, the parties shall discuss what, if any,
       amendment to the terms of this Agreement may be required in order
       to arrive at an equitable solution.

       Section 3.3  Termination.  Either party shall have the right to
       terminate this Agreement at any time by giving written notice to
       the other party of that party's material default of any material
       covenant or provision of this Agreement and if such default is not
       corrected within 15 days after the party in default is in receipt
       of the written notice from the other party with respect to such
       default.

       Section 3.4  Dispute resolution.  All claims, disputes, or other
       material matters in controversy ("disputes") arising out of or
       relating to this Agreement shall be resolved exclusively before the
       American Arbitration Association.

       Section 3.5  Amendments.  No change, modification, or amendment to
       this Agreement shall be valid or binding unless such change or
       modification shall be in writing signed by the party against whom
       the same is sought to be enforced.

       Section 3.6  Confidentiality.  Contractor shall keep confidential
       all information provided by or produced under this Agreement for
       Sanguine, provided that this information (a) is not already in the
       public domain, (b) is not already in the Contractor's possession at
       the time of this Agreement, or (c) is not furnished by a third
       party not bound to confidentiality by Sanguine.  The terms of this
       Section shall survive the termination or expiration of this
       Agreement.

       Section 3.7  Intellectual Property.  All materials provided by
       Sanguine under this Agreement are deemed to be owned by Sanguine
       and shall be returned at the conclusion of the Agreement.  All
       information generated by Contractor under this Agreement shall be
       the property of Sanguine.  All information generated by the
       Contractor shall be delivered to Sanguine at the completion of this
       Agreement, one copy of which will be retained for archival
       documentation by Contractor.
<PAGE>
       Contractor shall retain ownership to all methods, information,
       ideas, data, concepts, and techniques proprietary to Contractor and
       developed before or during this Agreement not related to the work
       covered by this Agreement and not derived from information provided
       by Sanguine under this Agreement.

       Section 3.8  Indemnification.  Both parties agree to defend
       indemnify, and hold harmless the other party and its officers,
       employees, and agents from any and all claims and liabilities of
       any type or nature whatsoever arising out of any act, omission, or
       negligence by the party, its officers, employees, and agents that
       may arise out of or result from or in any way be related to the
       effort pursuant to this Agreement.

       Each party shall promptly notify the other party of any claim,
       complaint, or lawsuit.  The indemnifying party shall control the
       defense of any third party claim, complaint, or lawsuit and the
       indemnified party shall cooperate fully in the investigation and
       defense of any such claim, complaint, or lawsuit.

       Section 3.9  Assignment.  Contractor may not assign this Agreement,
       in whole or in part, without the prior written consent of Sanguine.

       Section 3.10  Use of Materials.  Contractor shall use the materials
       provided by Sanguine solely for performing its efforts under this
       Agreement.  Contractor shall not sell, transfer, disclose, or
       otherwise provide access to the materials to any person or entity
       without the prior written consent of Sanguine except that
       Contractor may allow access to the materials to employees and
       agents for purposes consistent with this Agreement provided that
       prior to such disclosure, such individuals shall have executed
       written agreements consistent with the terms hereof. Contractor will
       take all reasonable steps to ensure that such employees and agents
       will use the materials in a manner that is consistent with federal,
       state, and local laws and the terms of this Agreement.  Contractor
       understands that the materials may have biological and/or chemical
       properties that are unpredictable and unknown at the time or
       transfer, that they are to be used with caution and prudence, and are
       not be used for testing in or treatment of humans.

       Section 3.11  Applicable Law.  This Agreement shall be construed
       and enforced under the laws of the State of California, other than
       those provisions governing conflicts of laws.

       Section 3.12  Severability.  In the event any provision, clause,
       sentence, phrase, or word thereof, or the application thereof in
       any circumstance, is held to be invalid or unenforceable, such
       invalidity or unenforceability shall not affect the validity or
       enforceability of the remainder thereof.
<PAGE>
       Section 3.13  Captions.  Titles or captions of articles and
       paragraphs contained in this Agreement are inserted only as a
       matter of convenience and for reference, and in no way define,
       limit, extend, or describe the scope of this Agreement or the
       intent of any provision hereof.

       Section 3.14  Entire agreement.  This Agreement, together with
       Attachments 1, constitutes the entire agreement between
       Contractor and Sanguine with respect to the subject matter of this
       Agreement and no representation or statement not contained in the
       main body of this Agreement or Attachments 1 shall be binding
       on Contractor or Sanguine as a warranty or otherwise.

       IN WITNESS WHEROF, the parties hereto have caused this Agreement to
       be executed by their duly authorized officers.

       CONTRACTOR:                          Sanguine Corporation:

       By: /s/Gina Stack                    By:/s/Thomas C. Drees
       Name:  Ms. Gina Stack                Name:  Thomas C. Drees
       Title:  Chief Operating Officer      Title: Chairman & CEO

       Date:                                Date:
<PAGE>
              ATTACHMENT 1   Statement of Work (SOW)

    Contract shall use best commercial practices and reasonable efforts to
    identify and recommend a fluorosufactant solution(s) for use with
    perfluorocarbondecalin to produce an emulsion that can be used as an
    effective RBC supplement in human whole blood.

         1.1  Assess and recommend a matrix of stable perfluorocarbondecalin
              emulsions based on preformulation analysis of
              fluorosurfactants.
         1.2  Determine optimum emulsion droplet size based on
              functional requirements.
         1.3  Prepare and test preliminary test emulsions using the
              selected surfactant, additives, and stabilizers or various
              injectable excepients based on the functional requirements
              for PHER-O2 in order to determine candidate emulsions for
              test.  Quantity of preliminary test emulsions limited to
              minimum required for further evaluation.
         1.4  Perform stability testing against steam sterialization
         1.5  Perform emulsion stability testing studies of the
              emulsions at 5 degrees C and 25 degrees C with sample analysis
              time points at 30, 60, and 90 days.
         1.6  Recommend candidate emulsion formulation for animal
              testing including test results.
         1.7  Provide an Analytical Method Development Report for use in
              a regulatory filing.
         1.8  Provide a Formulation Development Report for use in a
              regulatory filing.
         1.9  Provide six (4) liters of candidate emulsion (BLP) for
              further use in animal testing.
<PAGE>

                PHER-O2 FUNCTIONAL REQUIREMENTS

         Intra-vascular half-life:     minimum eight hours

         Shelf life (storage):    one year non-refrigerated
                                  two years refrigerated

         Toxicity:      negligible

         Acceptable tissue retention time (liver, spleen, etc.):  Trace or
         less (after 30 days)

         Unit size of delivered product:    400 ML

         Unit packaging:     non-extractable plastic (Medidex) Glass
                             is acceptable alternative.


         Primary application (FDA approval target):   Angioplasty


                PHER-O2 FORMULATION SPECIFICATIONS

         Base:               Perfluorocarbondecalin

         Fluorosurfactant solution:         To be determined

         Droplet (particle) size: 0.1 micron or smaller

         Percent of PFC in PHER O2 (W/V):   minimum 70%
<PAGE>
  ENCLOSURE 1 to ATTACHMENT 1

              MATERIALS TO BE FURNISHED BY SANGUINE

    1.

    2.

    3.

<PAGE>
  ATTACHMENT 2