Exhibit 10.5



                              AMENDED AND RESTATED
                       MASTER STRATEGIC ALLIANCE AGREEMENT

THIS AMENDED AND RESTATED MASTER STRATEGIC ALLIANCE AGREEMENT, dated as of
August ____, 1998 (the "Agreement"), is made and entered into by and between
HemaSure Inc., a Delaware corporation ("HEMA" or "HemaSure"), and the American
Red Cross Biomedical Services a unit of the American National Red Cross, a
not-for-profit corporation chartered by an act of Congress ("ARCBS"). This
Agreement amends and restates that certain Master Strategic Alliance Agreement
dated June 5, 1996 between HEMA and ARCBS and, as of the date hereof, shall
replace said Master Strategic Alliance Agreement in its entirety.

                                  INTRODUCTION

WHEREAS, ARCBS is the nation's pre-eminent provider of blood services, serving
more than 3,000 hospitals through the generous donations of some 22,000 people
daily; 

WHEREAS, HEMA is, among other things, in the business of developing products to
increase the safety of donated blood and to improve certain blood collection and
transfusion procedures; and

WHEREAS, ARCBS and HEMA (collectively, the "Parties") believe that a strategic
alliance and cooperation between them would be in their mutual interest, all in
accordance with the terms and conditions hereinafter set forth,

NOW, THEREFORE, in consideration of the promises and the mutual covenants of the
Parties herein contained, it is hereby agreed as follows:

1. Scope of Agreement.

     1.1 The Parties' intention under this Agreement is to facilitate the
     development and expansion of a strategic alliance between them covering the
     following areas:

          (a) a co-development arrangement between the Parties with respect to
     HEMA's leukoreduction filter (also known as r\LS System );

          (b) a collaboration on HemaSure's leukocyte recovery project;

          (c) a collaboration on HemaSure's in-line red blood cell filtration
     project;

          (d) a collaboration with respect to the development of a dockable
     platelet filter;

          (e) a collaboration with respect to the development of an in-line
     whole blood filter;

          (f) a collaboration with respect to a dockable system to remove tumor
     cells from stem cell collections.

     Each of the projects, collaborations, programs or agreements set forth
     above shall be hereinafter referred to as a "Project."


778200.1
<PAGE>



     1.2 Each Party agrees to negotiate in good faith the definitive terms of
     each of the Projects described above. All of the agreed projects will be
     covered by separate Development Agreements, as described in Section 2.4.

     1.3 It is understood by the Parties that this Agreement is intended to
     establish a structure of open communication and coordination so as to
     facilitate the expansion of the Parties' cooperation as set forth above and
     is not intended to inhibit or restrict either Party from pursuing business
     opportunities outside of this Agreement where deemed appropriate by such
     Party.

2. Administration.

          2.1 As soon as practicable after the date hereof, the Parties shall
     establish a Contract Management Advisory Committee ("CMAC") which shall
     remain in existence for the term of this Agreement. The CMAC shall be
     composed of one senior management representative of each ARCBS and HEMA who
     shall initially be the individuals set forth in Section 15.1 (i) and
     Section 15.1 (iii) below. Such individuals shall have the responsibility
     for coordinating and overseeing all HEMA and ARCBS activities taking place
     pursuant to this Agreement, and shall each have sufficient authority to
     fulfill these responsibilities in the name and on behalf of his or her
     company in all matters related to this Agreement. The CMAC will maintain
     open communications to coordinate the overall cooperation of the Parties
     hereunder. In this regard, the CMAC shall hold a meeting at least once
     every three months to discuss:

          (a) Status of any existing Projects; and

          (b) General issues of business development and strategic cooperation
     between the Parties, including possible multi-party cooperative efforts
     with other potential strategic partners, in connection with any existing
     Products.

          2.2 Meetings of the CMAC shall be held at the Parties' convenience at
     such times and such locations as are mutually acceptable to the Parties. An
     extraordinary meeting may be convened at any time at the written request of
     either Party. This extraordinary meeting will be held at a location of the
     other Party's choosing. The Party hosting the meeting shall prepare the
     agenda and minutes for the meeting.

          2.3 No recommendation or other action may be made or taken by the CMAC
     unless the representatives of both ARCBS and HEMA are in attendance. All
     decisions of the CMAC shall be made by unanimous agreement.

          2.4 In such case as the Parties decide to pursue a Project, the CMAC
     shall establish the guidelines for the development of such Project. The
     apportionment of each Parties' responsibilities pertaining to a specific
     Project will be set forth in, and governed by, individual definitive
     collaboration, development and/or other similar agreements to be entered
     into by the Parties in respect of such Project (each of which shall be
     hereinafter referred to as a "Development Agreement"). The CMAC shall
     recommend for approval by the Parties the execution of such Development
     Agreements.


                                       2
<PAGE>




          2.5 Any issues that may arise during any phase of a Project which
     cannot be resolved by the Project teams of the Parties shall be referred to
     the CMAC for resolution.

3.   Warrants. Upon the execution and delivery by the Parties of Development
     Agreements HemaSure shall issue to ARCBS warrants to purchase shares of
     HemaSure's common stock, par value $.01 per share (the "Common Stock"), in
     the respective amounts set forth on Exhibit A and at an exercise price per
     share equal to 110% of the last reported Sale Price for the Common Stock as
     of the close of business as of the date hereof (the "Warrants"), pursuant
     to a warrant agreement mutually agreeable to HemaSure and ARCBS. The
     Warrants shall expire five years from the date of grant as contemplated by
     this Agreement. HEMA also shall grant to ARCBS certain demand and "piggy
     back" registration rights with respect to the Common Stock issuable upon
     exercise of the Warrants pursuant to a registration rights agreement, in
     form and substance satisfactory to the respective parties. The "Sale Price"
     per share of Common Stock for such date shall be (a) the closing sale price
     per share of Common Stock on such date, or if no sales occurred on such
     date, the most recent such price, as reported on the composite tape of such
     national securities exchange as shall then be the primary market for the
     Common Stock, or (b) if the Common Stock shall not then be listed or
     admitted to trading on any national securities exchange or if the Common
     Stock shall then be so listed or admitted to trading on a national
     securities exchange but that shall not then be the primary market for the
     Common Stock, the closing sale price per share of the Common Stock on such
     date, or if no sales occurred on such date, the most recent such price, as
     reported by NASDAQ or a comparable system, or (c) if not determinable as
     aforesaid, the mean between the highest and lowest bid prices reported on
     such date, or if no sales occurred on such date, the most recent such mean,
     by market makers and dealers for the Common Stock listed as such by the
     National Quotation Bureau, Incorporated or any similar successor
     organization.

4.   Disputes. It is the intention of the Parties to settle amicably all
     differences or disputes arising from this Agreement by conference and
     negotiation. The Parties will first attempt to resolve any working level
     disputes through the Project team and, if there is no resolution, through
     the CMAC. In the event that any problem or dispute is not so resolved,
     either Party may, upon written notice to the other, request that the matter
     be referred to senior management officers within each respective
     organization with the express authority to resolve the problem or issue.
     Such representatives shall meet or confer at least once in good faith to
     negotiate a resolution. If the representatives are unable to resolve the
     problem or dispute within 21 calendar days, any Party may take the matter
     to the Dispute Resolution Procedure set forth below. No Party may institute
     litigation until such procedure has been completed unless, and to the
     extent that, doing so is necessary to avoid irreparable harm.

     Dispute Resolution Procedure. If any problem or dispute arising out of, or
     related to, this Master Agreement is not resolved by the Parties in the
     manner described above, at the request of either of the Parties, the matter
     shall be submitted to mediation, or to such other form of dispute
     resolution acceptable to both of the Parties. The mediation shall be
     conducted in accordance with the Center for Public Resources Model
     Procedure for Mediation of Business Disputes.


                                       3
<PAGE>



5.   Specific Performance. Notwithstanding Section 4 above, the Parties agree
     that any breach or failure by either Party to perform its obligations under
     Sections 6, 7, and 10 below shall result in immediate and irreparable
     damage to the other Party which cannot be fully and adequately compensated
     in money damages and that, in the event of such breach or failure, the
     other Party shall be entitled to injunctive relief and specific performance
     in addition to any other remedies to which it may be entitled at law or in
     equity.

6.   Public Statements and Trade Names

          6.1 Neither Party shall make or distribute any public announcement or
     media release concerning this Agreement or any Development Agreement or the
     subject matter or terms of this Agreement or any Development Agreement
     without the prior written approval of the other Party, except as otherwise
     required by law as advised by counsel.

          6.2 Neither this Agreement nor any Development Agreement grants or is
     intended to grant to any Party a license to use the trademark, trade name
     or any other intellectual property of any other Party. Each of the Parties
     recognizes that the name of the other Party represents a valuable asset of
     that Party and that substantial recognition and goodwill are associated
     with such trade name and such Party's various trademarks. Each Party hereby
     agrees that neither it nor any of its affiliates shall use at any time the
     other Party's name, logo, or any other trademarks without prior written
     authorization from such other Party.

          6.3 Each of the Parties acknowledges that a violation of this Section
     6 would cause irreparable harm to the other Party for which no adequate
     remedy at law exists and each Party therefore agrees that, in addition to
     any other remedies available, the aggrieved Party shall be entitled to
     injunctive relief to enforce the terms of this Section. The prevailing
     Party shall be entitled to recover all costs and expenses, including
     reasonable attorney's fees incurred because of any legal action arising in
     relation to this Section.

7.   Subject Matter of Projects. Notwithstanding Section 1.3, HEMA agrees that,
     during the term of this Agreement and for so long as a particular Project
     is covered by a Development Agreement between the Parties that has not
     expired or been terminated, it shall not with or from any third party
     solicit, entertain, or encourage proposals with respect to, or participate
     in any negotiations or discussions concerning, or enter into any
     transactions involving, the subject matter of such Project without ARCBS's
     prior written consent. HEMA shall instruct its officers, directors, agents
     and affiliates to refrain from doing any of the foregoing.

8.   Limitation of Liability and Remedies. IN NO EVENT SHALL A PARTY BE LIABLE
     TO THE OTHER PARTY FOR ANY INDIRECT, INCIDENTAL, SPECIAL OR CONSEQUENTIAL
     DAMAGES, INCLUDING WITHOUT LIMITATION FOR LOSS OF ANTICIPATED PROFITS, IN
     CONNECTION WITH AN ALLEGED BREACH OF THIS AGREEMENT, HOWEVER CAUSED, BY
     NEGLIGENCE OR OTHERWISE; PROVIDED THAT THIS LIMITATION ON LIABILITY SHALL
     NOT APPLY IN THE EVENT OF A WILLFUL OR GROSSLY NEGLIGENT BREACH OF THE
     PROVISIONS OF THIS AGREEMENT.


                                       4
<PAGE>



9.   Relationship of the Parties.

          (a) The relationship of the Parties under this Agreement is that of
     independent contractors and that relationship shall continue as such
     throughout the term of this Agreement. Nothing contained in this Agreement
     shall be construed to constitute a partnership, agency relationship,
     association or joint venture between the Parties. No officer, employee or
     agent of either Party shall be deemed to be the officer, employee or agent
     of the other, and neither Party shall represent otherwise. Neither Party
     shall have the authority to make any agreement or commitment, or incur any
     liability on behalf or the other, except as specifically authorized in this
     Agreement.

          (b) The Parties shall not enter into any Development Agreement with
     respect to which the substance of sub-paragraph (a) as applied thereto
     would not apply.

10.  Confidential Information. During the term of this Agreement and for a
     period of five (5) years from any termination or expiration hereof, the
     Parties agree to keep in confidence and not to disclose to any third party,
     or use for any purpose, except pursuant to, and in order to carry out, the
     terms and objectives of this Agreement and any Development Agreement, any
     Confidential Information. As used herein, "Confidential Information" shall
     mean all trade secrets or confidential or proprietary information relating
     to the business of the disclosing Party or any information relating to any
     Project or the subject matter of any Project. The restrictions on the
     disclosure and use of Confidential Information set forth in the first
     sentence of this Section 10 shall not apply to any Confidential Information
     which (a) was known by the receiving Party (as evidenced by the receiving
     Party's written records) prior to disclosure by the disclosing Party
     hereunder; (b) is or becomes part of the public domain through no fault of
     the receiving Party; or (c) is disclosed to the receiving Party by a third
     party having a legal right to make such a disclosure. In addition, the
     foregoing confidentiality and nondisclosure obligations shall not apply to
     information which is required to be publicly disclosed by law or regulation
     provided that, in such event, the receiving Party provides the disclosing
     Party with prompt notice of such disclosure so that the disclosing Party
     has the opportunity if it so desires to seek a protective order or other
     appropriate remedy.

11.  Indemnification; Insurance.

                                       5

<PAGE>



          (a) HEMA agrees to indemnify and hold harmless ARCBS and its
     directors, governors, officers, employees and agents against any liability,
     claim, cost or expense (including reasonable attorneys' fees) in respect to
     bodily injury, death, and property damage arising from the willful
     misconduct or negligent activity of HEMA, its directors, officers,
     employees or agents during its performance of its responsibilities under
     this Agreement and/or the manufacture or sale of any product developed
     pursuant to this Agreement or any Development Agreement, including but not
     limited to any claim against ARCBS for infringement of patent rights owned
     or held by Pall Corporation. HEMA further agrees to indemnify ARCBS, its
     directors, officers, employees and agents from and against any loss,
     damages, costs, or expenses ("liability") in connection with any claim
     arising from any defect in the merchandise, goods or products provided or
     in the provision of any services pursuant to this Agreement or any
     Development Agreement, or by reason of the nature of the materials
     contained in said merchandise, goods or products or provision of service,
     except to the extent that the final order of a court of competent
     jurisdiction has determined that a proportion of such liability thereof was
     caused by the willful misconduct or negligent activity of ARCBS, its
     directors, officers or employees, in which case, ARC shall be responsible
     solely for its proportionate share of the liability.

          (b) ARCBS agrees to defend, hold harmless, and indemnify HEMA, its
     directors, officers, employees and agents against any liability, claim,
     cost or expense (including reasonable attorneys' fees) in respect to bodily
     injury, death, and property damage arising from the sole negligence of
     ARCBS, its directors, officers or employees during its performance of its
     responsibilities under this Agreement

         (c) Each Party shall maintain the following insurance coverages in full
     force and effect for the term of this Agreement. Each Party further agrees
     to maintain insurance with terms, conditions and amounts not less than that
     set forth herein for the term of any Development Agreement, unless any such
     Development Agreement shall specify coverage terms, conditions or amounts
     for either or both of the Parties which exceed that set forth in this
     Agreement:

               (i) Commercial General Liability Insurance in an amount of at
          least $4,000,000 (Four Million Dollars) 2) an auto liability policy
          with at least $1,000,000 (One Million Dollars) in coverage and; 3)
          Workers' Compensation coverage covering each Party's own employees
          with statutory limits for each jurisdiction where the work required
          under this Agreement or any Development Agreement is performed
          (including monopolistic states if any work is to be performed in one
          or more of them) and an employers' liability policy with at least the
          following limits, $250,000 per accident, $500,000 per disease, and
          $250,000 disease (each employee).

               (ii) HEMA further agrees to maintain not less than $4,000,000
          (Four Million Dollars) of products liability coverage naming ARCBS an
          additional insured party with respect to any product developed,
          created, manufactured, distributed or sold as a result of this
          Agreement or any Development Agreement. Said products liability
          coverage shall include coverage for claims made against the policy for
          injury occurring as a result of a flaw problem with the design or
          manufacture of HEMA's products. HEMA agrees to maintain full
          replacement value "All Risk" property insurance on all property and
          equipment of HEMA used under this Agreement or any Development
          Agreement, and said property insurance shall insure at all times all
          HEMA products being manufactured and HEMA agrees to waive any right of
          subrogation for loss or damage to any HEMA property at, on, or in
          ARCBS' or HEMA's facilities. HEMA agrees to obtain, if required in
          such property insurance, a waiver of subrogation in favor of ARCBS.
          Said property insurance shall include Business Interruption and Extra
          Expense coverage for such losses arising from loss or damage to
          aforementioned HEMA property without expectation of contribution from
          any such insurance ARCBS may maintain.


                                       6
<PAGE>







               (iii) Each Party shall, at its sole expense, keep in force
          policies of insurance in the amounts as specified, and as required by
          statute, with carriers reasonably satisfactory to the other; and said
          insurance will be written as primary policy coverage and not
          contributing with, or in excess of any insurance which the other Party
          shall carry with respect to the work of each Party under this
          Agreement. Certificates of insurance evidencing all of the above
          coverages and conditions (types and amounts) shall be produced upon
          written request and remain in full force and effect during the term of
          this Agreement. HEMA shall supply evidence of its property insurance
          on an ACORD "Evidence of Property Insurance" form 27. Each Party's
          certificate(s) of insurance shall provide for not less than thirty
          (30) days written notice of cancellation, non-renewal or reduction in
          terms and conditions below that required herein to the other Party.

12.  Term and Termination.

          12.1 This Agreement shall become effective upon execution by both
     Parties and shall continue in full force and effect for 5 years from the
     date of this Agreement, unless terminated earlier by the mutual agreement
     of the Parties or in accordance with the provisions herein. This Agreement
     shall automatically renew for one additional 5 year term unless either
     Party provides written notice to the other Party no later than 90 days
     prior to the expiration of the first 5 year term of its desire (for any or
     no reason) that this Agreement expire and not renew at the end of the first
     5 year term, in which case this Agreement shall expire at such time and
     shall not be renewed. In the event this Agreement is renewed for a second 5
     year term, it shall continue in full force and effect for 5 years from the
     end of the first 5 year term, unless terminated earlier by the mutual
     agreement of the Parties or in accordance with the provisions herein.

          12.2 On the occurrence of any of the following events (each a
     "Termination Event"), this Agreement shall automatically terminate, unless
     the Party which has not caused or is not the subject of the Termination
     Event elects within 30 days following such Termination Event to waive
     termination:

          (a) a Party has filed a voluntary petition in bankruptcy, takes the
          benefit of any insolvency act, is dissolved or adjudicated a bankrupt;
          upon the entry of a decree or order by a court having jurisdiction
          approving a petition with respect to a Party seeking reorganization,
          arrangement, adjustment, or composition under any applicable federal
          or state bankruptcy, insolvency or similar law; upon the written
          admission by a Party of its inability to pay its debts generally as
          they become due; the taking of any corporate action by a Party in
          furtherance of any of the foregoing actions -- each, effective
          immediately upon receipt of notice of termination;

          (b) the appointment of a receiver, liquidator, assignee, trustee,
          sequestrator or similar official for all or substantially all of the
          business or assets of a Party, effective immediately upon receipt of
          notice of termination.

          12.3 Either Party shall have the right to terminate this Agreement for
     "cause" at any time, effective upon the giving of written notice to the
     other Party in the event that the other Party commits a default or
     violation of this Agreement which is not remedied within thirty (30) days
     after receipt of written notice thereof.


                                       7
<PAGE>



          12.4 ARCBS shall be entitled to unilaterally terminate this Agreement
     in the event the conditions for termination arise, as provided in Section
     17, effective upon the giving of written notice to HEMA of such event.

13.  Entire Agreement. This Agreement is the complete statement of the agreement
     between the Parties, and supersedes all prior proposals, understandings and
     all other agreements, oral and written, between the Parties relating to the
     subject matter of this Agreement. Notwithstanding the foregoing, in no
     event shall the Master Purchase Agreement dated April 15, 1996 between the
     Parties be deemed to be superseded by this Agreement. This Agreement cannot
     be modified or altered except by a written instrument duly executed by both
     Parties.

14.  Successors, Assignment. This Agreement shall be binding upon, and shall
     inure to the benefit of, successors to a Party hereto, but shall not
     otherwise be assignable by either Party without the prior written consent
     of the other Party.

15.  Notices.

          15.1 All notices, requests, consents and other communications under
     this Agreement shall be in writing and shall be mailed by first class
     certified or registered mail, return receipt requested, postage prepaid:

               (i) if to HEMA, at HemaSure Inc., 140 Locke Drive, Marlborough,
          Massachusetts 01752 ((508) 485-6045), Attention: President, or at such
          other address or addresses as may have been furnished in writing by
          HEMA to ARCBS;

               (ii) a copy of all information sent to HEMA should also be sent
          to Luke P. Iovine, III, Esq., Battle Fowler LLP, 75 East 55th Street,
          New York, New York, 10022 (telecopier no. (212) 856-7816); and

               (iii) if to ARCBS, at 1616 North Fort Myer Drive, Rosslyn,
          Virginia 22209 (telecopier no. (703) 312-5734), Attention: Niall M.
          Conway, Vice President of Manufacturing, or at such other address or
          addresses as may have been furnished in writing by ARCBS to HEMA.

          15.2 Notices provided in accordance with this Section shall be deemed
     delivered two business days after deposit in the mail.


16.  Relation to Development Agreements. Execution of this Agreement shall not
     obligate either Party to develop or commercialize any product in the
     absence of a Development Agreement relating thereto. All references in this
     Agreement to this Agreement shall not encompass or be deemed to encompass
     any or all Development Agreements unless this Agreement expressly refers to
     such Development Agreements.


                                       8
<PAGE>



17.  Severability.In the event implementation of any of the provisions of this
     Agreement presents a material risk of loss of American Red Cross's tax
     exempt status or the imposition of intermediate sanctions under Section
     4958 of the Internal Revenue Code of 1986, as amended ("Sanctions"), or if
     any provision of this Agreement is held invalid, illegal or unenforceable
     (any such provision, an "Invalid Provision") in any jurisdiction, the
     Parties shall promptly negotiate in good faith a lawful, valid and
     enforceable provision that is as similar in terms to such Invalid Provision
     as may be possible while giving effect to the future benefits and burdens
     accruing to the Parties hereunder, and which removes the risk, if any, of
     loss of American Red Cross's tax exempt status and the imposition of
     Sanctions, and the remaining provisions of this Agreement shall remain
     binding on the Parties hereto. In the event that the Parties cannot agree
     on a provision to replace an Invalid Provision, at ARCBS's election, (a)
     the Parties shall attempt to renegotiate their relationship in good faith
     under commercially reasonable terms, or (b) this Agreement shall terminate
     under Section 12.3 of this Agreement.

18.  Status of the American Red Cross. Notwithstanding any other provision in
     this Agreement to the contrary, the Parties acknowledge and agree that
     ARCBS shall not be required to engage in any activity hereunder or under
     any Development Agreement that compromises or would compromise the
     charitable tax-exempt status of, or presents or would present a reasonable
     likelihood of the imposition of Sanctions on, the American Red Cross.

19.  Expenses. Each Party shall be solely responsible for its own expenses under
     this Agreement.

20.  Captions. All captions herein are for convenience only and shall not be
     interpreted as having any substantive meaning.

21.  Governing Law. This Agreement shall be governed by the laws of State of New
     York, in a venue in the Commonwealth of Virginia, without regard to its
     conflicts of law rules or principles.

     IN WITNESS WHEREOF, the Parties have caused this Agreement to be executed
     by their duly authorized officers effective the date first written above.


     HEMASURE INC.                          AMERICAN RED CROSS
                                            BIOMEDICAL SERVICES

     By:                                    By:   
            ------------------------              --------------------------

     Name:                                  Name: 
            ------------------------              --------------------------

     Title:                                 Title:
            ------------------------              --------------------------

                                       9
<PAGE>



                                    Exhibit A

<TABLE>
<CAPTION>


                                                                             Number of Shares Exercisable Under
                                                                           Warrant Upon Execution of Definitive
                                Project                                                  Agreement

<S>                                                                                       <C>
Definitive collaboration agreement with respect to HemaSure's
leukoreduction filter (subsection 1.1(a));                                                150,000
Definitive collaboration agreement with respect to HemaSure's leukocyte
recovery project (subsection 1.1(b));                                                      50,000
Definitive collaboration agreement with respect to HemaSure's in-line
red blood cell filtration project (subsection 1.1(c));                                     50,000
Definitive collaboration agreement with respect to dockable platelet
filters (subsection 1.1(d));                                                               50,000
Definitive collaboration agreement with respect to in-line whole blood
filters (subsection 1.1(e));                                                               50,000
Definitive collaboration agreement with respect to a dockable system to
remove tumor cells from stem cell collections (subsection 1.1(f)).                         50,000
                                                                                           ------

                                                                                          400,000
</TABLE>

                                       10