Research  Centre  J  lich                                   /logo/
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Forschungszentrum  J  lich  - BEO - D-52425 J lich     OF NORTH-RHINE WESTPHALIA
Delivery  Address:  Leo-Brandt-Strasse  -  D-52428  J  lich

     BEO
     PROJECT  AGENCY  FOR
     BIOLOGY,  ENERGY,  ECOLOGY
     OF  THE  MINISTRY  OF  ECONOMIC  AFFAIRS  AND  SMALL  AND
     MEDIUM-SIZED  BUSINESS,  TECHNOLOGY  AND  TRANSPORT
                               Your  contact  partner:  Ms.  Voigt  /  Ms.  Kehr
SanguiBioTech  AG           To  be  indicated  on  reply:  BEO32/9804v04/VK/S-ZB
Mr.  Prof.  Dr.  Wolfgang Barnikol        Telephone: (0 24 61) 61  27 06 / 27 34
Alfred-Herrhausen-Strasse  44        Telefax:  (0  24  61)  61  27  30  or 28 40
                                              E-mail:    beo32.beo@fz-juelich.de
58455  Witten  an  der  Ruhr                    J  lich,      30  November  1998


                     A P P R O P R I A T I O N   N O T I C E
                                (Project Support)

Re.:          Promotion  Subsidies of the Federal Land of North-Rhine-Westphalia
              here:     Technology  Programme  Economy  (TPW)
              Ref.  No.:     315  -  9804V04
              Project:   DEVELOPMENT  OF  A  METHOD  FOR  THE  PRODUCTION  OF
                         ARTIFICIAL  OXYGEN  CARRIERS  ON  THE  BASIS  OF HYPER-
                         POLYMERIC  HAEMOGLOBINS  AS  BLOOD  ADDITIVE  AND
                         SO-CALLED  BLOOD  SUBSTITUTE

Reference:     Your  application  of  29  March  1998
               Additions  -  receipt  by  BEO  on  06  November  1998

Appendices: 1     General  Collateral Regulations for the Appropriation of
             Project  Promotion  Subsidies  (ANBest-P)
       2     Special  Collateral  Regulations  for  the Appropriation of Project
             Promotion  Subsidies  (BNBest-P)
       3     Work,  Time  and  Expenditure  Schedule  with  Appendices  A  and B
       4     Determination  of  the  need  for  subsidy
       5     Request  for  Appropriation  form
       6     Proof  of  Utilization  form  (partial  proof  of  utilization)
       7     Proof  of  Utilization  form  (final  proof  of  utilization)
       8     Final  Report  form
       9     Exploitation  Report  form
     10     Term  Sheet
     11     Waiver  of  Legal  Remedies  form
     12     Cost  Plan

<PAGE>
Dear  Sirs,

1.     APPROPRIATION:
     On  your above-mentioned application, we grant you, out of the funds of the
Ministry of Economic Affairs and Small and Medium-Sized Business, Technology and
Transport  of  North-Rhine  Westphalia  (MWMTV-NW), for the period from 08 April
1998  to 31 March 2001 (appropriation period), the appropriation of a subsidy to
the  amount  of
                    DM  3,574,575.00
     amount  in  words:  three-five-seven-four-five-seven-five  German  Marks.

2.     THE  APPROPRIATION  IS  GRANTED  FOR  THE  ABOVE-MENTIONED  PROJECT.
     The project-tying period for the items acquired with the subsidy is 3 years
(from the end of the appropriation period). After the expiration of that period,
you  can  freely  dispose  of  such  items.

3.     TYPE/AMOUNT  OF  FINANCING,  EXPENDITURE  ELIGIBLE  FOR  SUBSIDY
     The subsidy is granted as a contribution in the form of a partial financing
(maximum  amount  - see appropriation amount) of total expenditures eligible for
subsidy  to  an  amount  of  DM  8,974,226.00.
     The  percentage  of  the  partial  financing  and  the determination of the
expenditure  eligible  for  subsidy  are  based  on  Appendices  3  and  4.

4.     APPROPRIATION  LINE
     Of  the  subsidy  amount,  there  are  attributed  to
               Appropriation  in  the  year  of  issue:      DM    645,266.00
               Appropriation  commitment:                    DM  2,929,309.00
               of  that,  in     1999     DM  1,911,152.00
                                 2000     DM    865,571.00
                                 2001     DM    152,586.00


<PAGE>
5.     PAYMENT
     The  subsidy shall be paid out upon request according to Items 1.4, 1.41 of
ANBest-P.

     A  special  bank  account  must be opened for the management of the amounts
called.  Any interest on deposits credited to such special account must be fully
transferred  to  the  Federal  Land  of  North-Rhine  Westphalia.

COLLATERAL  REGULATIONS
-     The ANBest-P and BNBest-P annexed to this notice as well as the appendices
3  to  10  are  an  integral  part  of  this  notice.
-     Moreover,  we  ask  you  note that promotion funds of the Land must not be
used for the financing of market services, neither directly nor indirectly. This
in  particular  applies  to  any devices acquired from and investments made with
funds  of  the  Land  during  the  tying  period.
-     This  notice  is given subject to the condition precedent that the overall
financing  of  the  project,  in  particular  the financing of the own share, is
proven  in  a  transparent and binding manner. The first request for payment can
only  be  complied  with  after  this  requirement  has  been  met.
-     The  proof of toxicological safeness of the additives to be developed that
is  planned  for  August  2000  is  a  fundamental  milestone for the successful
completion  of  the  overall  development.  That is why the subsidy funds to the
amount  of  DM  420,000.00  (40  %  of the total expenditure to the amount of DM
1,050,000.00)  will  remain  blocked  until  the  submission of the results of a
respective  re-evaluation. A respective intermediate report must be submitted to
the  project  agency  and  to  BioGenTec  not  later  than  by  August  2000.

REMARK
We  point  out  that  all  information  given  in  the  application  that  the
appropriation, granting, reclamation, further granting or leaving of the subsidy
depends  on,  in accordance with the "Guidelines on the Appropriation of Project
Promotion  Subsidies  under the Technology Programme Economy of the Federal Land
of  NRW",  circular  order  of  the  Minister  of  Economic  Affairs,  Small and
Medium-Sized  Business  and  Technology  of  20  March  1985,  is  regarded  as
subsidy-relevant information within the meaning of   264 of the Criminal Code in
connection  with   1  of  the  Land  Subsidy  Act.
You  are obliged to immediately report any facts that prevent the appropriation,
granting,  further  granting,  utilization  or  leaving  of  the  subsidy or are
relevant  to  the  reclamation  of  the  subsidy.

<PAGE>
In  case  the project development is delayed and therefore the partial amount of
the  subsidy  planned for the respective calendar year is not needed to its full
amount  or if the project cannot be completed until the end of the appropriation
period,  you  should notify us immediately, but not later than two months before
the  end of the respective calendar year or of the appropriation period, so that
it  will  be  possible  to  consider in time whether a notice of change is to be
issued.

INSTRUCTION  ABOUT  AVAILABLE  LEGAL  REMEDIES
Objection  against  this  notice  can  be  lodged  within  one  month  after the
notification.  The  objection  must  be  filed in writing or for record with the
Research  Centre  J  lich  GmbH,  Wilhelm-Johnen-Strasse,  52428  J  lich.
If  an  objection is lodged in writing, the time limit is only observed when the
letter  of  objection  is  received by the Research Centre J lich GmbH until the
expiration  of  the  above-specified  period.
In  case  of  a  failure  to observe the time limit due to the fault of a person
authorized  by  you,  such  fault  will  be  attributed  to  you.
The  payment  of  the  subsidy can only be effected after this notice has become
legally  valid.  You  can  bring  about  the legal validity of the appropriation
notice  and  thus  expedite  the payment by declaring in writing to the Research
Centre  J  lich  GmbH  that  you  waive  the  filing of an appeal (Appendix 11).

With  kind  regards
Research  Centre  J  lich  GmbH
p.p.                 p.p.
/signature/          /signature/
Dr.  K.  Koch          S.  Voigt

                                             30/11/98
                                             /signature/