CONTRIBUTION AGREEMENT



            THIS CONTRIBUTION AGREEMENT is made as at the Effective Time (as

defined below) on the [ ] day of April, 2004,



BETWEEN:



            HEMOSOL INC., (to be renamed LPBP Inc.) a corporation existing under

            the laws of the Province of Ontario,



            (hereinafter referred to as the "Vendor"),



                                     - and -



            HEMOSOL LP,

            a limited partnership existing under the laws of the Province of

            Ontario, by its general partner, HEMOSOL CORP., a corporation

            existing under the laws of the Province of Ontario,



            (hereinafter referred to as the "Purchaser").



            WHEREAS the Vendor is restructuring its business pursuant to a plan

of arrangement (the "Arrangement") under Section 182 of the Business

Corporations Act (Ontario) (the "OBCA") effected through the filing of articles

of arrangement dated the date hereof with the Director under the OBCA;



            AND WHEREAS the Vendor carries on the Purchased Business (as defined

below) and is the owner of the Purchased Assets (as defined below);



            AND WHEREAS, as one of the steps in the Arrangement, the Vendor will

sell and the Purchaser will purchase the Purchased Assets in consideration for

the issuance to the Vendor by the Purchaser of the Consideration Units (as

defined below) and the assumption by the Purchaser of the Assumed Liabilities

(as defined below), all in accordance with the provisions hereof;



            THIS AGREEMENT WITNESSES THAT in consideration of the respective

covenants, representations and warranties of the Parties hereinafter contained

and for other good and valuable consideration (the receipt and sufficiency of

which are hereby acknowledged by each Party), the Parties covenant and agree as

follows:



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                                       -2-





                                   ARTICLE 1

                                 INTERPRETATION



1.1         DEFINITIONS



            Where used in this Agreement, unless the context requires otherwise,

the following terms shall have the respective meanings set out below and

grammatical variations of such terms shall have corresponding meanings:



      "ARRANGEMENT AGREEMENT" means the arrangement agreement dated as of

      February 11, 2004 between MDS Inc. and the Vendor;



      "ASSUMED CONTRACTS" means all contracts, agreements and other legally

      binding instruments (written or otherwise) that the Vendor is party to

      immediately prior to the Effective Time, including the contracts,

      agreements and other legally binding instruments which are listed and/or

      described on Schedule A, in each case together with all rights, benefits,

      privileges and obligations of the Vendor thereunder, other than the

      Excluded Contracts;



      "ASSUMED LIABILITIES" has the meaning set out in subsection 3.3(a);



      "CONSIDERATION UNITS" means 9,999 partnership units of the Purchaser;



      "CORPORATION INDEMNITY AGREEMENT" means an indemnity agreement

      substantially in the form attached as Exhibit 12 to the Arrangement

      Agreement;



      "EFFECTIVE TIME" means that time after 12:01 a.m. (Toronto time) on the

      date hereof at which the transfer of the Purchased Assets contemplated by

      this Agreement is deemed to occur in accordance with the Arrangement;



      "EMPLOYEES" means all employees employed by the Vendor immediately prior

      to the Effective Time, excluding employees transferred to Hemosol Corp. on

      the date hereof;



      "EXCLUDED CONTRACTS" means, collectively, the Blood Products LP Agreement,

      the Corporation Indemnity Agreement, the Escrow Agreement, the MDS

      Indemnity Agreement and the Partnership Interest Transfer Agreement;



      "EXCISE TAX ACT" means part IX of the Excise Tax Act (Canada);



      "PARTIES" means the Vendor and the Purchaser and "Party" means either one

      of the Vendor or the Purchaser;



      "PURCHASED ASSETS" has the meaning set out in Section 2.1;



      "PURCHASED BUSINESS" means the business and operations of the Vendor

      carried on by the Vendor and its subsidiaries immediately prior to the

      Effective Time, including the development and manufacturing of

      blood-related proteins;



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                                       -3-





      "TAX ACT" means the Income Tax Act (Canada); and



      "TAX LOSSES" means tax credits and amounts deductible by the Vendor in

      computing its income for the purposes of the Tax Act and the Corporations

      Tax Act (Ontario).



      Capitalized terms used and not otherwise defined herein shall have the

      meaning given to such terms in the Arrangement Agreement.



1.2         RULES OF CONSTRUCTION



            Unless the context otherwise requires, in this Agreement:



      (a)   "Agreement", "this Agreement", "the Agreement", "hereto", "hereof",

            "herein", "hereby", "hereunder" and similar expressions mean or

            refer to this Agreement as amended, restated, modified, replaced or

            supplemented from time to time, including any amendment to this

            Agreement, and any agreement or instrument supplemental hereto and

            the expressions "Article", "Section" and "Schedule" followed by a

            number or letter mean and refer to the specified Article, Section or

            Schedule herein;



      (b)   the division of this Agreement into Articles and Sections and the

            insertion of headings are for convenience of reference only and

            shall not affect the construction or interpretation thereof;



      (c)   "include", "includes" and "including" shall mean "including without

            limitation" and "including without limiting the generality of the

            foregoing";



      (d)   words importing the singular number only shall include the plural

            and vice versa and words importing the use of any gender shall

            include all genders;



      (e)   reference to any agreement, indenture or other instrument in writing

            means such agreement, indenture or other instrument in writing, as

            amended, restated, modified, replaced or supplemented form time to

            time;



      (f)   reference to any statute shall be deemed to be a reference to such

            statute as amended, re-enacted or replaced from time to time; and



      (g)   time is of the essence hereof.

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