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Escrow Agreement - B. Braun Melsungen AG, Biopure Corp. and State Street Bank and Trust Co.

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                                ESCROW AGREEMENT

            ESCROW AGREEMENT, made and entered into as of the 2nd day of
September, 1997, among B. Braun Melsungen AG (hereinafter referred to as
"Seller"), Biopure Corporation (hereinafter referred to as "Purchaser"), and
State Street Bank and Trust Company (hereinafter referred to as the "Escrow
Agent").

            WHEREAS, Seller has entered into an Agreement of License
Termination, Stock Repurchase and Mutual General Release dated as of the date
hereof (the "Purchase Agreement") with Purchaser providing among other things
for the sale by Seller and the purchase by Purchaser of 3,020,934 shares of
Common Stock of Purchaser upon the terms and subject to the conditions set forth
or referred to in the Purchase Agreement; and

            WHEREAS, Seller has agreed to place in escrow the shares of Common
Stock to be purchased by Purchaser, and Purchaser has agreed to place in escrow
the purchase price for such shares; and

            WHEREAS, the Escrow Agent is willing to act as escrow agent on the
terms and conditions set forth in this Agreement.

            NOW, THEREFORE, in consideration of the premises, the mutual
covenants and agreements contained herein, and other good and valuable
consideration, the receipt and adequacy of which are hereby acknowledged,
Seller, Purchaser and the Escrow Agent agree as follows:

            1. Designation of Escrow Agent and Amount of Escrow Account. The
Escrow Agent is hereby appointed escrow agent to hold and dispose of the
escrowed funds and escrow shares provided for herein, in accordance with the
terms and conditions set forth in this Agreement, and the Escrow Agent accepts
such designation and agrees to hold and dispose of such escrowed funds and
escrow shares in accordance with the provisions of this Agreement.
Contemporaneously with the execution of this Agreement, Seller has deposited
with the Escrow Agent certificates for 3,020,934 shares representing the number
of shares of Common Stock purchased by Purchaser pursuant to the Purchase
Agreement, together with an undated, signed assignment in blank for each
certificate deposited (such certificates and assignments are collectively
referred to herein as the "Escrow Shares"). Purchaser will deposit with the
Escrow Agent from time to time the cash purchase price for such shares (the
"Escrow Account"). The Escrow Agent hereby acknowledges receipt of the Escrow
Shares and $1,000,000 as the first deposit in the Escrow Account.

            2. Investment Authority.

            (a) Subject to the provisions of this Section 2 and Section 3 of
this Agreement, the Escrow Agent and the Purchaser hereby acknowledge that
Seller shall have a security interest in the funds deposited by Purchaser and
all earnings thereon to secure payment of the amounts payable to Seller
hereunder (collectively, the "escrowed funds"). Escrow Agent shall invest all
such funds according to the written instructions of Seller; absent any written
instructions from


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Seller, such funds shall be invested and reinvested in United States Treasury
bills having maturities of approximately 30 days selected by it in its sole
discretion. Escrow Agent shall treat the Escrow Account as a trust fund in
accordance with the terms hereof.

            (b) The Escrow Agent shall not be responsible for any loss on any
investment made in accordance herewith.

            (c) Any liquidation of any investment made hereunder prior to its
maturity shall be executed by the Escrow Agent only in accordance with the
written instructions of Seller or in connection with the payment to Seller of
the purchase price pursuant to Section 3(c) or 3(d) herein.

            (d) All earnings realized on the escrowed funds (whether by way of
interest received or realized appreciation on any investment--collectively the
"Earnings") shall be for the benefit of Seller and the entire Earnings under the
control of the Escrow Agent shall be distributed to Seller concurrently with the
payment to Seller of the purchase price for the shares purchased by Purchaser.

            3. Escrow Disbursement Procedures.

            (a) Purchaser shall be purchasing the Escrow Shares through the
Escrow at a price of $2.0854 per Escrow Share.

            (b) Upon written notice given by Seller to the Escrow Agent, Seller
shall have the right, at any time and from time to time to consummate the sale
of not less than that number of whole Escrow Shares in the Escrow Account which
may be purchased by the aggregate amount on deposit in the Escrow Account
exclusive of Earnings at a price per Escrow Share equal to $2.0854. Upon receipt
from the Seller of a notice in the form of Attachment A hereto, with blanks
completed, accompanied by an assignment in blank (such notice and assignment are
collectively referred to herein as a "Seller Notice"), the Escrow Agent shall
within five business days (i) deliver to Biopure Corporation, at its offices set
forth at Section 7, for transfer, certificates accompanied by signed assignments
filled in with the name of the Purchaser for the number of shares to which the
Seller Notice pertains (with instructions to the Purchaser's transfer agent to
return to the Escrow Agent a certificate for shares, if any, not paid for
pursuant to the Seller Notice), and (ii) pay to Seller the purchase price for
the shares being purchased plus all Earnings on the escrowed funds liquidating,
as necessary, any investments.

            (c) When the deposits made to the Escrow Account equal, exclusive of
Earnings, $6,300,000 (or $6,300,000 less $2.0854 times each Escrow Share
previously delivered to, and paid for by, Purchaser), the Escrow Agent shall
deliver any remaining certificates together with assignments thereof to the
Purchaser and the balance of the purchase price and all Earnings shall be paid
to Seller. Purchaser shall not be responsible for any loss on any investment.

            (d) If on the anniversary date of this Agreement, 2002 there remain
in the Escrow Account any funds or Escrow Shares, all funds in the Escrow
Account shall be paid to Purchaser and all of the Escrow Shares shall be
returned to Seller.


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            (e) Upon distribution of the Escrow Account and Escrow Shares
pursuant to this Section 3, this Agreement and the escrow created hereunder
shall terminate, excepting the provisions of Section 6.

            4. Escrow Agent's Disclaimers. The obligations of the Escrow Agent
under this Agreement are subject to the following terms and conditions:

            (a) Except for this Agreement and the security interest granted to
Seller pursuant to the Purchase Agreement, the Escrow Agent is not a party to
and is not bound by any other agreement between Seller and Purchaser. The duties
and obligations of the Escrow Agent shall be determined solely by the express
provisions of this Agreement and the Escrow Agent shall not be liable except for
the performance of such duties and obligations as are specifically set forth in
this Agreement.

            (b) The Escrow Agent acts hereunder as a depository only and is not
responsible for or liable in any manner whatsoever for the sufficiency,
correctness, genuineness or validity of any funds, documents or other materials
deposited with it. The Escrow Agent shall not be required to defend any legal
proceeding which may be instituted against it with respect to the subject matter
of this Agreement unless it is requested to do so by one of the parties and is
indemnified by such requesting party to the Escrow Agent's satisfaction against
the cost and expenses including attorneys' fees of such defense, unless arising
from the Escrow Agent's bad faith or willful misconduct. The Escrow Agent shall
not be required to institute legal proceedings of any kind. The Escrow Agent
shall not be required to perform any acts which will violate any law or
applicable rules of any governmental agency.

            (c) The Escrow Agent shall not in any way be bound or affected by
any notice of modification or cancellation of this Agreement unless in writing
signed by Seller and Purchaser, nor shall the Escrow Agent be bound by any
modification hereof unless the same shall be reasonably satisfactory to it. The
Escrow Agent shall be entitled to rely upon any notice, certification, demand or
other writing delivered to it hereunder by Seller or Purchaser without being
required to determine the authenticity or the correctness or any fact stated
therein, the propriety or validity of the service thereof, or the jurisdiction
of the court issuing any judgment.

            (d) The Escrow Agent may consult counsel, including its in-house
counsel, and act in reliance upon any signature reasonably believed by it to be
genuine, and may assume that any person purporting to give any notice or
receipt, or make any statements, in connection with the provisions hereof has
been duly authorized to do so.

            (e) The Escrow Agent may consult counsel, including its in-house
counsel, and act relative hereto in reliance upon advice of counsel in reference
to any matter connected herewith, and neither it, its directors, officers or
employees shall be liable for any mistake of fact or error of judgment, or for
any acts or omissions of any kind, unless caused by its willful misconduct or
gross negligence.

            (f) Seller and Purchaser, jointly and severally, covenant and agree
to indemnify the Escrow Agent and hold it harmless without limitation from and
against any loss, liability or


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expense of any nature incurred by the Escrow Agent arising out of or in
connection with this Agreement or with the administration of its duties
hereunder, including but not limited to legal fees and other costs and expenses
of defending or preparing to defend against any claim or liability in the
premises, unless such loss, liability or expense shall be caused by the Escrow
Agent's gross negligence, bad faith, or willful misconduct. In no event shall
the Escrow Agent be liable for indirect, punitive, special or consequential
damages.

            5. Resignation of Escrow Agent. The Escrow Agent may resign and be
discharged of its duties as Escrow Agent hereunder upon thirty days' written
notice to Seller and Purchaser. Such resignation shall take effect thirty days
after the giving of such notice, or upon receipt by the Escrow Agent of an
instrument of acceptance executed by a successor escrow agent and upon delivery
by the Escrow Agent to such successor of the Escrow Account and the Escrow
Shares.

            6. Escrow Agent's Fee. The Escrow Agent shall be entitled to
reasonable compensation for its services to be paid 50% by Seller and 50% by
Purchaser. Seller and Purchaser, jointly and severally, agree to pay or
reimburse the Escrow Agent for legal fees incurred in connection with the
preparation of this Agreement and to pay the Escrow Agent's reasonable
compensation for its normal services hereunder in accordance with the attached
fee schedule, which may be subject to change hereafter on an annual basis. The
Escrow Agent shall be entitled to reimbursement on demand for all expenses
incurred in connection with the administration of this Agreement or the escrow
created hereby which are in excess of its compensation for normal services
hereunder, including without limitation, payment of any legal fees and expenses
incurred by the Escrow Agent in connection with resolution of any claim by any
party hereunder. The Escrow Agent is hereby granted a lien on the Escrow Account
and the Escrow Shares to protect, indemnify and reimburse itself for all fees,
costs, expenses and liabilities arising out of this Agreement and the
performance of its duties hereunder.

            7. Notice. Any notice, direction, request, instruction, legal
process or other instruments to be given or served hereunder by any party to
another shall be in writing, shall be delivered personally or sent by certified
mail or overnight courier, return receipt requested, to the respective party or
parties at the following addresses, and shall be deemed to have been given when
received.

            If to Seller:     B. Braun Melsungen AG
                              1 Carl-Braun-Strasse
                              D-34212 Melsungen, Germany
                              Attn: Hr. Klaus Hofer (General Counsel)
                              Telefax No. 011-49-5661-71-1551

            If to Purchaser:  Biopure Corporation
                              11 Hurley Street
                              Cambridge, MA 02141
                              Attn: Chairman


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            If to the Escrow Agent

                              State Street Bank and Trust Company
                              Two International Place
                              Boston, Massachusetts 02110
                              Corporate Trust Department, Fifth Floor
                              Attention: Braun Escrow Agreement
                              Fax: 617-664-5365

            Any party may change its address by written notice to each of the
other parties.

            8. Governing Law. This agreement shall be governed by and
interpreted in accordance with the laws of the State of New York and shall be
binding on the successors and assigns of the parties hereto.

            9. Definitions. Terms used as defined terms and not defined herein
shall have the meanings given such terms in the Purchase Agreement.

            10. Tax Reporting. The parties hereto agree that, for tax reporting
purposes, all interest or other income earned from the investment of the Escrow
Account shall be allocable to Seller. Seller shall furnish the Escrow Agent with
Seller's completed IRS Form 1001 and such other information as the Escrow Agent
may require for purposes of tax reporting.

            11. Dispute Resolution. It is understood and agreed that should any
dispute arise with respect to the delivery, ownership, right of possession,
and/or disposition of the Escrow Account, or should any claim be made upon such
Account by a third party, the Escrow Agent upon receipt of written notice of
such dispute or claim by the parties hereto or by a third party, is authorized
and directed to retain in its possession without liability to anyone, all or any
of said Fund until such dispute shall have been settled either by the mutual
written agreement of the parties involved or by a final order, decree or
judgment of a Court in the United States of America, the time for perfection of
an appeal of such order, decree or judgment having expired. The Escrow Agent
may, but shall be under no duty whatsoever to, institute or defend any legal
proceedings which relate to the Escrow Account.

            12. Consent to Jurisdiction and Service. Seller and Purchaser hereby
absolutely and irrevocably consent and submit to the jurisdiction of the courts
in the Commonwealth of Massachusetts and of any Federal court located in said
Commonwealth in connection with any actions or proceedings brought against them
or either of them by the Escrow Agent arising out of or relating to this Escrow
Agreement. In any such action or proceeding, said parties hereby absolutely and
irrevocably waive personal service of any summons, complaint, declaration or
other process and hereby absolutely and irrevocably agree that the service
thereof may be made by certified or registered first-class mail directed to them
or either of them at their respective addresses in accordance with Section 7
hereof.

            13. Force Majeure. Neither Seller nor Purchaser nor Escrow Agent
shall be responsible for delays or failures in performance resulting from acts
beyond its control. Such acts


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may be made by certified or registered first-class mail directed to them or
either of them at their respective addresses in accordance with Section 7
hereof.

            13. Force Majeure. Neither Seller nor Purchaser nor Escrow Agent
shall be responsible for delays or failures in performance resulting from acts
beyond its control. Such acts shall include but not be limited to acts of God,
strikes, lockouts, riots, acts of war, epidemics, governmental regulations
superimposed after the fact, fire, communication time failures, computer
viruses, power failures, earthquakes or other disasters.

            IN WITNESS WHEREOF, Seller, Purchaser and the Escrow Agent have
executed this Agreement as of the date set forth in the first paragraph.

                                           B. BRAUN MELSUNGEN AG

                                           By: /s/ Joachim Schnell
                                               --------------------------

                                               /s/ Caroll H. Neubauer


                                           BIOPURE CORPORATION

                                           By: /s/ Carl W. Rausch
                                               --------------------------


                                           STATE STREET
                                           BANK AND TRUST COMPANY

                                           By: /s/ Arthur J. MacDonald
                                               --------------------------


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