[CR Strategies LOGO]   66 Witherspoon St. Suite 355
Princeton, NJ 08542
800-582-8022
www.clinregstrategies.com

August 19, 2002

Taffy J. Williams, Ph.D.
President and CEO
Photogen Technologies Inc.
140 Union Square Drive
New Hope, PA 18938

Re:    Engagement Letter To Provide Clinical, Regulatory, and New Product
Development Services To Photogen Technologies Inc.

Dear Dr. Williams:

        This letter and the attached Business Terms set out Clinical Regulatory
Strategies, LLC's ("CRS"') proposal to provide consulting services to Photogen
Technologies Inc. ("Photogen" or the "Company") for the period August 1, 2002
through September 30, 2003. CRS personnel will serve as members of the Company's
New Product Development team, will aid in identifying and evaluating relevant
business development opportunities, will assist in building a superior new
product development capability for the Company and will provide service and
support to the Company's management team. CRS will document activities and
accomplishments in monthly status reports submitted to the President and CEO and
other designated Photogen management personnel. Billing will be designated
according to project area.

        During the term of the engagement, Mark Carvlin will provide locum
tenens management services equivalent to the Senior Vice President, Development
of Photogen and assume the responsibilities associated with this position as
well as coordinating the product development activities of associates at CRS,
the staff at Photogen and other external contractors as needed to develop PH-50,
N1177 and alternate formulations and other projects approved by the management
of Photogen. Pursuant to a work plan developed with and/or approved by
Photogen's CEO and other Photogen management personnel, Dr. Carvlin, working
with these parties, will establish, obtain approval and execute the development
plan, ensure that project timelines are met, and participate in the design of
research and discovery initiatives on an as needed basis. While 100% of
Dr. Carvlin's time may not be spent on Photogen activities, he is expected to be
present at Photogen on the same schedule as if he were a full time member of the
senior management team.

        For this project CRS' fees will be determined on a time and materials
basis, calculated from the cumulative person-days that we are on the assignment.
We expect that the CRS person-days for the period will amount to 1.5 full time
equivalents (FTE). The CRS team will be comprised of Oye Olukotun, Mark Carvlin
and Tom Fritz. Mark Carvlin will serve as the On-Site Manager for CRS and is
expected to spend no less than 3 days per week (³0.6 FTE) on this project. Tom
Fritz is expected to spend on average 3 days per week (0.6 FTE) on the
engagement and Oye Olukotun is expected to spend on average 1 day per week (0.2
FTE) on the engagement.

        As part of this engagement, CRS will assist in identifying and
recruiting qualified individuals to work directly for Photogen as full time
employees. It is understood that the Company wishes to have its employees assume
full responsibility for its products and that CRS professionals will transition
off of the projects by transferring knowledge, information, skills, and contacts
in an orderly, gradual manner. In the event that CRS or Photogen elects to
terminate this Agreement, CRS will allow for the same orderly transfer of
knowledge, information, skills and contacts.

        This Agreement is subject to approval by the Company's Board of
Directors (or an appropriate committee of the Board).

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        We appreciate the opportunity to work with you on this important
assignment. To confirm our authorization of the project, please sign and return
one copy of this letter, retaining the other copy for your records.

Sincerely yours,    
/s/  OYE OLUKOTUN      

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Oye Olukotun, MD
Chief Executive Officer
 
 
Acknowledged and agreed to this 29th day of August 2002 by:
/s/  TAFFY WILLIAMS      

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Taffy J. Williams, Ph.D.
President and CEO
Photogen Technologies, Inc.
 
 

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Business Terms

Term of Engagement:

August 1, 2002   Start Date September 30, 2003   Completion Date

        CRS will provide locum tenens management, expertise, assistance and
guidance to Photogen for the term of the engagement as the company develops and
executes its development of PH-50, N1177 and other product and/or business
opportunities as may be determined by Photogen.

        In consideration of the fact that new drug development is a lengthy and
complex process and that the completion date of the engagement might not
coincide with critical steps in this process, CRS will be obliged, at the
Company's direction, to extend the engagement for an additional 3 months (to
December 31, 2003) under the same terms and conditions. Thirty days before the
end of the extended engagement period the Company will notify CRS whether it
wishes to extend the agreement beyond December 31, 2003.

Deliverables:

•Mark Carvlin to assume the role and responsibilities equivalent to the Senior
Vice President, Development for Photogen on an interim basis for the term of the
engagement.

•Provide additional expertise in the areas of preclinical development,
regulatory affairs, manufacturing and clinical development to the PH-50 and
N1177 product development teams.

•Identify, interact and establish working relationships with Contract Research
Organizations (CRO's) needed to assist in the development of PH-50, leading to a
successful IND filing and first-in-man Phase I studies for the IV route of
administration.

•Ensure that preclinical and clinical studies meet US FDA and international
(ICH) guidelines for compliance.

•Perform a SWOT analysis of N1177 that results in a set of recommendations as to
how best to proceed with the development of N1177. Given that the company elects
to pursue the development of this compound, then CRS will augment Photogen's
staff in the clinical and regulatory areas.

•Work closely with Photogen's senior management to identify and acquire
strategic assets and business opportunities to build company/shareholder value.

•Assist Photogen to identify, interview and recruit highly qualified personnel
as needed to staff departments.

•Preparation submission of an IND for PH-50 to include assistance in:

a.Preparation, presentation and prosecution of the IND, and general regulatory
support for PH-50

b.Pre-IND package

c.Pre-IND meeting

d.IND (including Phase I protocol and 1st year CDP)

•Strive to contain cost while working to ensure the highest quality of
development possible.

•A monthly report detailing CRS activities, accomplishments and issues,
including as necessary variances and any revisions to project fees and expenses,
on the engagement will be provided to the Company.

Expenses:

        CRS will bill you at cost for all out-of-pocket expenses directly
incurred on this engagement including travel, industry research, communications,
and report and presentation preparation. All expenses incurred will be in
accordance with Photogen's Business Expense and Travel Policy. We will obtain
your prior approval for any out of the ordinary expenditures.

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Rates:

Managing Partner (Oye Olukotun)   $375/hour ($3,000/day) Partner(s) (M. Carvlin,
T. Fritz)   $250/hour ($2,000/day)      

Payment:

        For this project CRS' fees will be determined on a time and materials
basis, calculated from the cumulative person-days that we are on the assignment.

        CRS will invoice Photogen monthly for its professional fees and expenses
incurred during the prior month. The first invoice will be submitted August 31,
2001.

        The total professional fees for this engagement are not to exceed
$408,000 (exclusive of expenses) without your prior written approval. CRS will
closely monitor project fees and expenses and, if necessary, will seek approval
from Photogen to exceed $408,000 no later than 45 days in advance of this amount
being reached.

        Billing will include an itemized accounting by project.

        Invoices are due within 30 days after receipt.

        Although we feel that the proposed time and resources are adequate to
bring this effort to a successful conclusion, completion within these limits
depends on changes in the direction of the work that are dictated by you. We
will bring to your attention as soon as recognized any factors that will affect
these estimates.

Stock Warrant:

        Within 30 days of execution of this contract Photogen and CRS will
execute a warrant agreement in addition to fees related to the services outlined
in this agreement as an addendum to this agreement.

Confidentiality:

        CRS's ability to carry out the required work is heavily dependent upon
its past experience in providing similar services to others, and CRS expects to
continue such work in the future. However, CRS recognizes the importance of
protecting Photogen's rights to its ideas, inventions, discoveries, trade
secrets, confidential information and good will and agrees as follows:

        CRS agrees that it will not, at any time during or for five years after
the termination of CRS' engagement with Photogen (or such longer period
designated by Photogen in writing with respect to specific items of Proprietary
Information), communicate, disclose, or otherwise make available to any person
or entity, or use for its own account or benefit (except in the course of CRS'
engagement with Photogen) or for the benefit of any other person or entity, any
information or materials proprietary to Photogen that relate to Photogen's
business or affairs that are of a confidential nature, including, but not
limited to, techniques, formulas, processes, products, product ideas, trade
secrets, inventions (whether patentable or not), information or materials
relating to existing or proposed pharmaceutical or biopharmaceutical products
(in all and various stages of development), drug delivery and/or diagnostics,
"know-how", marketing techniques and materials, marketing and development plans,
customer lists and other customer information (including current and future
prospects), partnering/strategic partnering information and plans, price lists,
pricing policies, personnel information, marketing and financial information
(collectively, "Proprietary Information"). Proprietary Information includes any
and all such information and materials, whether or not obtained by CRS with the
knowledge and permission of Photogen, and whether or not developed, devised or
otherwise created in whole or in part by CRS' efforts.

        The confidentiality obligations contained within this Agreement will
survive the termination, expiration or cancellation of this Agreement.

Use of CRS Name and Work Products:

        In connection with this engagement, CRS may furnish Photogen with
presentations, analyses or other such materials. Photogen understands and agrees
that any such materials will be furnished solely for their information and
internal use in connection with the engagement and may not be used for any other
purpose or be published, quoted, copied, condensed, paraphrased or delivered to
any other party without the prior written consent of CRS, such consent not to be
unreasonably withheld. Photogen further agrees not to refer to CRS or attribute
any

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information to CRS in the press, for advertising or promotional purposes, or for
the purposes of informing or influencing the investment community without the
prior written consent of CRS.

Indemnification:

        Photogen hereby agrees to indemnify and hold CRS harmless from and
against all claims, liabilities, losses, damages, and expenses as they are
incurred, including legal fees arising out of any action brought by a third
party that is directly related to the services provided by CRS under this
Agreement. Photogen shall not, however, be liable under the foregoing indemnity
agreement to the extent that any such claims, liabilities, losses, damages, and
expenses result from the negligence, willful misfeasance or breach of any of its
obligations under this Agreement by CRS.

        CRS agrees to indemnify, defend and hold Photogen and its subsidiaries,
affiliates, directors, officers, employees, agents and representatives
(collectively, the "Photogen Parties") harmless from and against all losses,
claims, damages, causes of action, liabilities, costs and expenses (including
without limitation, all reasonable attorneys' fees, costs and expenses) arising
out of or relating to (i) the violation by CRS of any applicable law, order or
regulation; or (ii) the negligence, willful misconduct or breach of any
obligations under this Agreement on the part of CRS in connection with the
services provided under this Agreement.

        The indemnity obligations contained within this Agreement will survive
the termination, expiration or cancellation of this Agreement.

Standard for Performance of Services and Compliance with Policies:

        CRS shall perform all services under this Agreement in a timely,
professional and ethical manner. CRS shall comply with all corporate policies
established or observed from time to time by Photogen that are applicable to the
services being provided and that Consultant is made aware of.

Inventions:

        If during the course of CRS' performance of the services hereunder, CRS
conceives or actually reduces to practice a new invention, whether or not
patentable, or an improvement of an existing invention or any other item of
intellectual property involving the Photogen compounds, the Proprietary
Information or any other Photogen intellectual property or resources (inclusive
of new uses, formulations, therapeutic combination, or methods of treatment) for
which CRS is providing consultation services under this Agreement, CRS shall
promptly notify Photogen. The new invention or use shall be promptly disclosed
to Photogen's CEO, and shall be the sole property of and is hereby assigned to
Photogen. CRS shall take all actions, including executing documents, necessary
to fully effectuate the foregoing.

Termination:

        Either Photogen or CRS may terminate the Agreement, at any time with or
without cause upon thirty (30) days' written notice from Photogen to CRS (or in
the case of termination of this Agreement by CRS, written notice from CRS to
Photogen). In the event that CRS elects to terminate this agreement, CRS will
allow for an orderly transfer of knowledge, information, skills and contacts.

        The termination of this Agreement shall not relieve either party of its
obligation to the other in respect of (i) maintaining the confidentiality of
information, (ii) obtaining consents for advertising purposes and publications,
(iii) compensation for services performed prior to termination, and as
appropriate, services performed pursuant to the transfer of knowledge
(iv) assignments of patents and inventions, and (v) retention of records.

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Other:

        Any change in this engagement letter shall be confirmed in writing. All
communication and notices required to be in writing under this Agreement shall
be delivered personally, by courier, sent by telegram, or mailed to the parties
at the addresses set forth below, or such other addresses as the parties may
designate in writing.

If to Photogen:   If to CRS:
Photogen Technologies, Inc
 
Clinical Regulatory Strategies, LLC 140 Union Square Drive   66 Witherspoon St.
Suite 355 New Hope, PA 18938   Princeton, NJ 08542
Attention: Taffy Williams, Ph.D.
 
Attention: Oye Olukotun, MD President and CEO   Chief Executive Officer

        This letter shall be interpreted according to the laws of the State of
New Jersey. In performing services hereunder, CRS is an independent contractor
for Photogen. Employees of CRS are not and shall not be considered employees of
Photogen for any purpose.

        Nothing shall be construed to create a partnership, joint venture or
agency relationship between the parties. Photogen will have title to all
documentation, records, raw data or other work product generated during the
performance of the Services. Copies of all documentation, records, and raw data
will be provided to Photogen with the final report unless otherwise specified.

        Neither this Agreement nor any rights or obligations hereunder may be
assigned or subcontracted by CRS without the prior written consent of Photogen.

        Any and all disputes arising under, or in connection with, this
Agreement shall be resolved by submission to final and binding arbitration in
accordance with the then-prevailing commercial Arbitration Rules ("Rules") of
the American Arbitration Association. A single arbitrator shall be chosen in
accordance with the Rules and the proceedings shall be conducted in Mercer
County, New Jersey. In addition, the arbitrator shall base his award upon
substantial evidence and in accordance with New Jersey law but shall have no
power or jurisdiction to award any punitive or exemplary damages. Each party
shall be responsible for its own costs including attorney's fees and expert
witness fees. Arbitration fees shall be equally shared by the parties. A party
may seek non-monetary relief (such as an injunction) from a court of competent
jurisdiction in addition to arbitration.

        This Agreement represents the entire understanding between the parties,
and supersedes all other agreements, express or implied, between the parties
concerning the subject matter hereof.

        If any provision of this Agreement is determined in a final,
non-appealable ruling to be invalid or unenforceable, such invalidity or
unenforceability shall not affect the remaining provisions of this Agreement and
the affected provision shall be modified to the extent necessary to be valid and
enforceable and to reflect the intent of the parties to the fullest extent
possible.

ADDENDUM

        Photogen will grant to CRS a warrant to purchase 760,000 shares of
Common Stock (prior to consideration of the proposed stock reverse split) of the
Company. The option shall be granted as of the date of closing of the current
institutional financing, have a term of five years from the date of grant, have
an exercise price equal to the closing price of the Company's Common Stock on
the date of the closing of the institutional financing and shall vest only upon
achievement of milestones attained within the term of the engagement according
to the following schedule:

Milestone

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  Amount

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File USA IND with FDA for PH-50   20% Inject first patient in USA Phase 1 (or
Phase 2) for PH-50 or analog   35% Completion of USA Phase 1 (or Phase 2) for
PH-50 or analog   35% Initiation of Clinical Trials (Phase 1, 1/2, 2) for
N1177—or alternative product   10%

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