At October 31, 2001, approximately 3% of the outstanding shares of Class A Common Stock of Biopure were owned by two limited partnerships, Biopure Associates Limited Partnership and Biopure Associates Limited Partnership II. The primary purpose of these partnerships is to own shares of common stock of the Company. The general partner of these partnerships is an officer of the Company, and the limited partners include certain current and former employees, officers, directors and consultants to the Company.

     In August 1990, the Company made loans to certain directors and officers to allow them to purchase Class A Common Stock. The principal and interest for two loans that remain outstanding, not including the loan made to Carl Rausch, the Company’s Chairman and CEO, was due on July 31, 2000 and arrangements have been made for their payment in full by March 31, 2002. The principal balances continue to bear interest until all principal and interest are paid. In December 2001, the Company received payment in full for one of the two remaining loans. Since October 31, 2001, notes receivable has been reduced by the principal and interest payment amount of $80,000. The principal and interest on Mr. Rausch’s loan is due on July 31, 2003. The notes receivable for all loans, except the loan made to Mr. Rausch, bear interest at the prime rate (7.0% at October 31, 2001) and are included in stockholders’ equity in the accompanying consolidated financial statements. The loan for Mr. Rausch bears interest at a fixed 4.71% rate.

     On May 24, 2001, the Company acquired by merger the 74% of Reperfusion Systems, Inc., a Delaware corporation, it did not already own. Reperfusion was formed in 1993 to investigate a device for resuscitation to be used with Hemopure or other oxygen carrying fluids. Related to this acquisition, the Company issued 67,270 shares of Biopure Class A Common Stock and paid $55,000 to the Reperfusion shareholders. A one-time expense of $1,604,000, of which $1,511,000 is non-cash, was recorded as research and development for intellectual property and pre-clinical studies.