**Exhibit 10.23**

 

STANDSTILLAND MAKE-WHOLE AGREEMENT

 

This AGREEMENT is enteredinto as of December 30, 2002 by and between Xmark Fund, L.P. and Xmark Fund,Ltd. (collectively, “Xmark”), Alliance Pharmaceutical Corp., a New Yorkcorporation (“Alliance”), and Photogen Technologies, Inc., a Nevada corporation(“Photogen”).

 

WHEREAS, Xmark is the holderof Secured Promissory Notes from Alliance having an outstanding stated value of$3,375,000 (the “Xmark Notes”), which Xmark Notes were purchased pursuant to aSecured Note Purchase Agreement, dated July 23, 2002 (together with theinstruments, documents and agreements related thereto, the “Xmark LoanDocuments”);

 

WHEREAS, Alliance is indefault of the Xmark Notes and, as of the date hereof, $4,262,500.71 in outstandingstated value and accrued interest is due and owing to Xmark under the XmarkNotes;

 

WHEREAS, Photogen iscontemplating a purchase of substantially all of Alliance’s imaging modalitiesassets used in connection with Alliance’s imaging and diagnostic imagingbusiness, including without limitation with respect to development,manufacture, marketing and sale of the ImagentÒ and Optison products (the“Asset Purchase”); and

 

WHEREAS, to induce Photogento pursue the Asset Purchase and to make associated bridge loan advances toAlliance, Xmark and Alliance have agreed to certain standstill covenants,subject to the terms and conditions contained herein;

 

NOW, THEREFORE, for good andvaluable consideration, the receipt and sufficiency of which are hereby acknowledged,the parties, intending to be legally bound, hereby agree as follows.

 

1.                                       XmarkStandstill Agreement.  Xmarkshall not exercise any rights against Alliance as a creditor, whether securedor unsecured, or otherwise for a period (the “Standstill Period”) commencing onthe date hereof, and ending on the earliest to occur of (i)January 29, 2003,(ii) the determination by Photogen not to pursue the Asset Purchase, (iii) thewritten termination of negotiations between Photogen and Alliance with respectto the Asset Purchase, (iv) the exercise of any remedies against the assets ofAlliance by any creditor other than Xmark or its affiliates, (v) Alliance’sfiling of a petition under any bankruptcy, insolvency or debtor’s relief law ormaking an assignment for the benefit of its creditors, (vi) a court ofcompetent jurisdiction entering an order or decree under any federal or statebankruptcy law and (X) is for relief against Alliance in an involuntary case,(Y) appoints a custodian, receiver or other similar official for all orsubstantially all of Alliance’s property, or (Z) orders the liquidation ofAlliance (each of the events specified in clauses (v) and (vi) of this Section1 are referred to as, a “Bankruptcy Proceeding”), or (vii) the date specified ina notice by Photogen on one day’s written notice to Xmark and Alliance.Photogen shall notify Xmark in writing within one day following the occurrenceof any event specified in clauses (ii) or (iii) above. The termination of theStandstill Period is referred to herein as the “Termination Date”.

 

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During the StandstillPeriod, Xmark shall not pursue, institute, encourage or join in any proceedingagainst Alliance at law or equity to realize upon any collateral or otherwise.Xmark agrees that until the Termination Date, Xmark will not, directly orindirectly ask, demand for, accelerate, accept or receive any payments of, orother amounts or consideration on account of, the Xmark Notes (including by wayof subrogation) or any other debt from Alliance or commence, or join with anycreditor in commencing, any suit, action or judicial proceeding or bankruptcy,reorganization, insolvency or similar proceedings with respect to Alliance orthe Xmark Notes or any other Alliance debt or assets; nor shall Xmark and Allianceagree to or effect any amendment or change to the terms of the Xmark LoanDocuments except as contemplated in this Agreement or to preserve theperfection and priority of Xmark’s security interest; provided, however, Xmarkmay transfer the Xmark Notes and its interest in the Xmark Loan Documents to athird party upon the prior written consent of Photogen, which shall not beunreasonably withheld, and provided that such third party purchaser agrees inwriting to be bound by the terms of this Agreement. Xmark shall execute anddeliver to Photogen instruments confirming this Agreement if and to the extentnecessary to enforce the provisions of this Agreement. The terms of thisAgreement, the standstill effected hereby, and the rights of Photogen which arecreated hereunder, shall not be affected by (i) any amendment, addition,modification, extension, increase, restatement or supplement of or to any ofthe Xmark Notes or Xmark Loan Documents or any instrument, document oragreement relating thereto, (ii) any exercise or non-exercise of any right,power or remedy under or in respect of the Xmark Notes or Xmark Loan Documentsor any instrument, document or agreement relating thereto, (iii) any claim ordefense as to the validity or enforceability of any instruments, documents oragreements relating to the proposed Asset Purchase, or (iv) any othercircumstance which might otherwise constitute a defense available to, or adischarge of Alliance, Xmark or any other party.

 

2.                                       Issuance ofPhotogen Common Stock.

 

2.1                                 Balance ofSecured Note: Interest during Standstill Period.  The parties acknowledge and agree that Alliance owes Xmark$4,262,500.71 (the “Starting Balance”) in outstanding stated value and accruedinterest pursuant to the Xmark Notes as of the date hereof. During theStandstill Period and following the termination or expiration of the StandstillPeriod, until such time as the Xmark Notes have been indefeasibly paid in full,interest will continue to accrue on the Xmark Notes pursuant to the existing termsand conditions of the Xmark Notes (the interest that accrues on the Xmark Notessolely during the Standstill Period is referred to as, the “StandstillInterest”). Photogen shall have no responsibility for, or obligation withrespect to the payment of, the Starting Balance, any interest accrued on theXmark Notes and included in the StartingBalance, or any interest that accrues on the Xmark Notes from and afterthe Termination Date.

 

2.2                                 Issuance ofPhotogen Shares.

 

(a)                                  As soon aspracticable after the execution of this Agreement, Photogen shall issue twohundred fifty thousand (250,000) shares (the “Initial Photogen Shares”) ofPhotogen common stock, $0.01 par value per share (the “Photogen Common Stock”),to Xmark.

 

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(b)                                 So long as theStandstill Period is still in effect immediately prior to January 29, 2003,Photogen shall have the irrevocable option to extend the Standstill Periodthrough February 28, 2003, subject to earlier termination in accordance withclauses (ii) through (vii) of Section 1 hereof, in consideration for theissuance of an additional two hundred fifty thousand (250,000) shares ofPhotogen Common Stock (subject to adjustment for stock splits, stockcombinations, stock dividends and the like effected after the date of thisAgreement) (the “First Option Photogen Shares”) to Xmark. Photogen may exerciseits irrevocable option by providing written notice of such election to Xmark atleast two (2) days prior to January 29, 2003. Photogen shall issue the FirstOption Photogen Shares to Xmark within five (5) business days following itsexercise of the irrevocable option in accordance with this Section 2.2(b).

 

(c)                                  So long as theStandstill Period is still in effect immediately prior to February 28, 2003,Photogen shall have the irrevocable option to extend the Standstill Periodthrough March 30, 2003, subject to earlier termination in accordance withclauses (ii) through (vii) of Section 1 hereof, in consideration for theissuance of an additional two hundred fifty thousand (250,000) shares ofPhotogen Common Stock (subject to adjustment for stock splits, stockcombinations, stock dividends and the like affected after the date of thisAgreement) (the “Second Option Photogen Shares” and together with the InitialPhotogen Shares and the First Option Photogen Shares, the “Photogen Shares”) toXmark. Photogen may exercise its irrevocable option by providing written noticeof such election to Xmark at least two (2) days prior to February 28, 2003.Photogen shall issue the Second Option Photogen Shares to Xmark within five (5)business days following its exercise of the irrevocable option in accordancewith this Section 2.2(c).

 

(d)                                 If theStandstill Period is still in effect immediately prior to March 30, 2003, theStandstill Period may be extended by mutual written agreement of Xmark andPhotogen, but neither party is obligated to enter into any such agreement toextend the Standstill Period.

 

(e)                                  Photogen shalluse its reasonable best efforts to register the Photogen Shares under theSecurities Act of 1933, as amended, within 120 days from the date hereof (the120th day following the date hereof is referred to as, the“Registration Date”). Xmark shall be entitled to payment in an amount equal to1.5% of the Photogen Shares, valued at the Share Value (as defined below), forany 30-day period or pro rata for any portion thereof following theRegistration Date if no registration statement is effective with respect to thePhotogen Shares. Such payment may be made, at Photogen’s election, in cash orPhotogen Common Stock (valued at the Share Value).

 

(f)                                    In the eventthat Xmark indefeasibly receives payment for all of the Standstill Interest, asdetermined in accordance with Section 2.2(i), within one year of theTermination Date, whether by (a) payment by Photogen during such one yearperiod (which Photogen may, in its sole discretion, make to Xmark at any timeduring such one year period), (b) cash payment by Alliance during such one yearperiod (which Alliance is obligated to make to Xmark), or (c) payment by anythird party during such one year period, whether in connection with a sale ofthe stock or assets of Alliance, a secured party sale, bankruptcy or otherwise

 

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(collectively, a “Payment Event”), then Xmarkshall immediately (y) return to Photogen good and marketable title to all ofthe Photogen Shares then held by Xmark or its affiliates, free and clear of allliens, claims, rights, options and encumbrances, but (z) to the extent Xmarkhas sold any Photogen Shares prior to the Payment Event, pay Photogen cash foreach Photogen Share not so delivered to Xmark due to their having been soldprior to the Payment Event, valued at $1.00 per share, (subject to adjustmentin connection with any stock split or stock combination of the Photogen Common Stock effected after the date of thisAgreement, the “Share Value”).  To effectthe transfer of Photogen Shares, Xmark shall deliver to Photogen the certificate(s)representing the Photogen Shares duly endorsed for transfer with signaturesguaranteed.

 

(g)                                 In the eventthat Xmark does not receive any of the Standstill Interest within one year ofthe Termination Date as a result of the occurrence of a Payment Event, thenXmark shall have the right to retain all of the Photogen Shares.

 

(h)                                 In the eventthat Xmark indefeasibly receives a portion, but less than all, of theStandstill Interest, as determined in accordance with Section 2.2(i), withinone year of the Termination Date as a result of the occurrence of a PaymentEvent, then Xmark shall immediately (y) return to Photogen good and marketabletitle to such number of Photogen Shares then held by Xmark or its affiliates,free and clear of all liens, claims, rights, options and encumbrances, equal tothe pro rata portion of the Standstill Interest which it did receive (with suchPhotogen Shares valued at the Share Value), and (z) to the extent the value ofthe returned Photogen Shares does not equal the portion of the StandstillInterest received by Xmark, pay Photogen cash equal to the pro rata portion ofthe Standstill Interest received by Xmark less the aggregate  Share Value for all Photogen Shares returnedto Photogen by Xmark.

 

(i)                                     Upon Xmark’sreceipt of any proceeds from a Payment Event, such proceeds shall be deemed tobe applied first against the Starting Balance, then against the StandstillInterest and thereafter against any additional amounts due under the XmarkNotes, including without limitation interest accrued after the StandstillPeriod.  Notwithstanding anythingcontained herein to the contrary,

 

(a)                                  if Xmarkreceives non-cash consideration (other than non-cash consideration in the formof debt or equity securities of Photogen) on behalf of the Xmark Notes pursuantto a Bankruptcy Proceeding, Xmark and Photogen shall jointly select anindependent appraiser to determine the fair market value of the non-cash consideration received by Xmark (which determination of fair marketvalue shall be binding upon Xmark and Photogen) and the fair market value of such non-cash consideration, asdetermined by the independent appraiser, shall be applied toward the repaymentof the Xmark Notes and the Standstill Interest for purposes of this Agreementin the order of priority set forth in this Section 2.2(i), (and providedfurther that if Xmark is obligated to pay Photogen cash pursuant to Section2.2(f) or 2.2 (h), then Xmark may pay such amount by transfer and assignment ofsuch non-cash consideration, valued at such fair market value), and

 

(b)                                 if Xmarkreceives non-cash consideration in the form of debt or equity securities ofPhotogen on behalf of the Xmark Notes pursuant to a Bankruptcy

 

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Proceeding, such non-cash consideration shallnot count towards the repayment of the Xmark Notes and the Standstill Interestfor purposes of this Agreement.

 

Xmark agrees that anyPhotogen Shares issued pursuant to this Section 2.2 shall be subject to a stoporder with Photogen’s transfer agent and legend on such stock certificate(s)limiting transferability except in accordance with this Agreement andapplicable securities laws and upon delivery of an opinion of counselacceptable to Photogen.

 

ExampleFor Illustration Purposes Only:  Assuming that the Standstill Period expires after 60 days,Photogen accordingly issued 500,000 restricted shares to Xmark and the StartingBalance plus the Standstill Interest is $4,500,000:

 

•                  If Xmark indefeasiblyreceives cash and non-cash consideration (with the fair market value of thenon-cash consideration being determined by an independent appraiser mutuallyacceptable to Xmark and Photogen) from a third party (other than Photogen) inthe amount of $4,500,000 for amounts due and owing under the Xmark Notes withinone year following the Termination Date, then Xmark shall return all 500,000Photogen Shares.  If Xmark sold 200,000of the Photogen Shares prior to receipt of suchcash and non-cash consideration on behalf of the Xmark Notes, then Xmarkshall return 300,000 of the Photogen Shares and either (i) transfer all or aportion of such non-cash consideration to Photogen having a fair market valueequal to $200,000 or (ii) pay Photogen $200,000 in cash.

 

•                  If Xmark indefeasiblyreceives cash and non-cash consideration (with the fair market value of thenon-cash consideration being determined by an independent appraiser mutuallyacceptable to Xmark and Photogen) from a third party (other than Photogen) inthe amount of $4,250,000 for amounts due and owing under the Xmark Notes withinone year following the Termination Date, then Xmark is entitled to keep 250,000of the Photogen Shares and is required to return the other 250,000 PhotogenShares. If Xmark sold 300,000 of the Photogen Shares prior to receipt of suchcash and non-cash consideration on behalf of the Xmark Notes, then Xmark shallreturn 200,000 Photogen Shares and either (i) transfer all or a portion of suchnon-cash consideration to Photogen having a fair market value equal to $50,000or (ii) pay Photogen $50,000 in cash.

 

3.                                       Representationsand Warranties of the Parties.

 

3.1                                 Xmark.           Xmark represents andwarrants to Photogen as follows.

 

(a)                                  The execution,delivery and performance of this Agreement (i) have been duly authorized by allnecessary corporate or partnership action on behalf of Xmark, (ii) do not andwill not violate any provision of law, rules, regulations, or orders or anyprovision of the charter, bylaws or other organizational documents of orbinding on Xmark, and (iii) do not and will not violate, result in the breachof, or constitute a default or require any consent under, any contract,agreement, indenture or instrument to which Xmark is a party or by which Xmarkor Xmark’s property may be bound or subject. This Agreement has been duly and validly

 

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executed anddelivered by Xmark and constitutes the legal, valid and binding obligation ofXmark, enforceable against Xmark in accordance with the terms hereof, subjectas to enforceability (x) to applicable bankruptcy, insolvency, reorganizationor moratorium and other similar laws affecting creditors’ rights generally and(y) to the application of general principles of equity.  No governmental or other approval is requiredin connection with the execution and delivery by Xmark of, and the performanceof the obligations of Xmark under, this Agreement.  Xmark understands that Photogen has no obligation or liability toXmark as to whether Photogen makes bridge loan advances to Alliance orcompletes the Asset Purchase.

 

(b)                                 Xmark has not sold, transferred, assigned, pledged or otherwisehypothecated or disposed of any of its rights to the Xmark Notes or any otherrights of Xmark as a secured or unsecured creditor of Alliance.

 

(c)                                  Xmark is an “accredited investor” as such term is defined in RegulationD under the Securities Act of 1933, as amended (the “1933 Act”).  The Photogen Shares to be received by Xmarkhereunder will be acquired for Xmark’s own account, not as nominee or agent,and not with a view to the resale or distribution of any part thereof inviolation of the 1933 Act, and Xmark has no intention of selling, granting anyparticipation in, or otherwise distributing the same in violation of the 1933Act.  Xmark acknowledges that it canbear the economic risk and complete loss of its investment in the PhotogenShares and has such knowledge and experience in financial or business mattersthat it is capable of evaluating the merits and risks of the investmentcontemplated hereby.  Xmark understandsthat the Photogen Shares are characterized as “restricted securities” under theU.S. federal securities laws inasmuch as they are being acquired from Photogenin a transaction not involving a public offering and that under such laws andapplicable regulations such securities may be resold without registration underthe 1933 Act only in certain limited circumstances, and the certificate(s) forthe Photogen Shares will bear a legend to that effect.  Xmark has had an opportunity to receiveadditional information related to Photogen requested by it and to ask questionsof and receive answers from Photogen regarding Photogen, its business and theterms and conditions of the offering of the Photogen Shares.  Xmark acknowledges access to copies ofPhotogen’s most recent Annual Report on Form 10-K for the fiscal year endedDecember 31, 2001, as amended (the “2001 10-K”), and all other reports andamendments thereto filed by Photogen pursuant to the Securities Exchange Act of1934, as amended (the “1934 Act”), since the filing of the 2001 10-K and priorto the date hereof (collectively, the “SEC Filings”) through EDGAR.  Xmark did not learn of the investment in thePhotogen Shares as a result of any public advertising or general solicitation.

 

3.2.                              Alliance.  Alliance represents and warrants to Xmarkand Photogen as follows.  The execution,delivery and performance of this Agreement (i) have been duly authorized by allnecessary corporate action on behalf of Alliance, (ii) do not and will not violateany provision of law, rules, regulations, or orders or any provision of thecharter, bylaws or other organizational documents of or binding on Alliance,and (iii) do not and will not violate, result in the breach of, or constitute adefault or require any consent under, any contract, agreement, indenture orinstrument to which Alliance is a party or by which Alliance or Alliance’sproperty may be bound or subject. This Agreement has been duly and validlyexecuted and delivered by Alliance and constitutes the legal, valid and bindingobligation of Alliance, enforceable against Alliance in accordance with theterms hereof, subject as to enforceability (x) to applicable

 

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bankruptcy,insolvency, reorganization or moratorium and other similar laws affectingcreditors’ rights generally and (y) to the application of general principles ofequity.  No governmental or otherapproval is required in connection with the execution and delivery by Allianceof, and the performance of the obligations of Alliance under, this Agreement.

 

3.3                                 Photogen.  Photogen represents and warrants to Xmark asfollows.

 

(a)                                  The execution, delivery and performance of this Agreement, includingthe issuance of the Photogen Shares, (i) have been duly authorized by allnecessary corporate action on behalf of Photogen, (ii) do not and will notviolate any provision of law, rules, regulations, or orders or any provision ofthe charter, bylaws or other organizational documents of or binding onPhotogen, and (iii) do not and will not violate, result in the breach of, orconstitute a default or require any consent under, any contract, agreement,indenture or instrument to which Photogen is a party or by which Photogen orPhotogen’s property may be bound or subject. This Agreement has been duly and validly executed and delivered byPhotogen and constitutes the legal, valid and binding obligation of Photogen,enforceable against Photogen in accordance with the terms hereof, subject as toenforceability (x) to applicable bankruptcy, insolvency, reorganization ormoratorium and other similar laws affecting creditors’ rights generally and (y)to the application of general principles of equity.  No governmental or other approval is required in connection withthe execution and delivery by Photogen of, and the performance of theobligations of Photogen under, this Agreement.

 

(b)                                 Photogen is a corporation duly organized, validly existing and incorporate good standing under the laws of the State of Nevada and is qualifiedto do business as a foreign corporation in each jurisdiction in which suchqualification is required, except where the failure to be so qualified wouldnot have, either individually or in the aggregate, a material adverse effect onthe business, operations, financial condition, assets, prospects, liabilitiesor contractual rights of Photogen, whether individually or taken as a whole (a“Material Adverse Effect”).  Photogenhas duly authorized the sale and issuance, pursuant to the terms of thisAgreement an adequate number shares of its common stock authorized andavailable for issuance hereunder, having the rights, restrictions, privilegesand preferences set forth in the Amended and Restated Articles ofIncorporation, as amended to date.

 

(c)                                  The issuance, sale and delivery of the Photogen Shares in accordancewith this Agreement have been duly authorized by all necessary corporate actionon the part of Photogen.  The PhotogenShares when so issued, sold and delivered against payment therefor inaccordance with the provisions of this Agreement will be duly and validlyissued, fully paid and non-assessable.

 

(d)                                 The SEC Filings are the only filings required of Photogen pursuant tothe 1934 Act for such periods.  At thetime of filing thereof, the SEC Filings complied as to form in all materialrespects with the requirements of the 1934 Act and did not contain any untruestatement of a material fact or omit to state any material fact necessary inorder to make the statements made therein, as amended and in the light of thecircumstances under which they were made, not misleading.  During the preceding two years, except asset forth in the SEC Filings:  Eachregistration statement and any amendment thereto filed by Photogen pursuant to

 

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the 1933 Act andthe rules and regulations thereunder, as of the date such statement oramendment became effective, complied as to form in all material respects withthe 1933 Act and did not contain any untrue statement of a material fact oromit to state any material fact required to be stated therein or necessary inorder to make the statements made therein, in light of the circumstances underwhich they were made, not misleading; and each prospectus filed pursuant toRule 424(b) under the 1933 Act, as of its issue date and as of the closing ofany sale of securities pursuant thereto did not contain any untrue statement ofa material fact or omit to state any material fact required to be statedtherein or necessary in order to make the statements made therein, in the lightof the circumstances under which they were made, not misleading.  Photogen is engaged only in the businessdescribed in the SEC Filings and the SEC Filings contain a complete andaccurate description in all material respects of the business of Photogen,taken as a whole, as required to be disclosed.

 

(e)                                  The financial statements included in each SEC Filing present fairly, inall material respects, the consolidated financial position of Photogen as ofthe dates shown and its consolidated results of operations and cash flows forthe periods shown, and such financial statements have been prepared inconformity with United States generally accepted accounting principles appliedon a consistent basis (except as may be disclosed therein or in the notesthereto, and, in the case of quarterly financial statements, as permitted byForm 10-Q under the 1934 Act).  Exceptas set forth in the financial statements of Photogen included in the SECFilings filed prior to the date hereof Photogen has not incurred anyliabilities, contingent or otherwise, except those incurred in the ordinarycourse of business, consistent (as to amount and nature) with past practicessince the date of such financial statements, none of which, individually or inthe aggregate, have had or could reasonably be expected to have a MaterialAdverse Effect.

 

(f)                                    Except as disclosed in the SEC Filings or on Schedule 3.3(f) hereto,there are no pending actions, suits or proceedings against Photogen or itssubsidiaries which affect any of its or their properties; and to Photogen’sknowledge, no such actions, suits or proceedings are threatened orcontemplated.

 

(g)                                 Photogen is in compliance with all applicable Nasdaq SmallCap Marketcontinued listing requirements.  Thereare no proceedings pending or to Photogen’s knowledge threatened againstPhotogen relating to the continued listing of its common stock on the NasdaqSmallCap Market and Photogen has not received any notice of, nor to Photogen’sknowledge is there any basis for, the delisting of its common stock from theNasdaq SmallCap Market.

 

(h)                                 Neither Photogen nor any person or entity acting on its behalf hasconducted any general solicitation or general advertising (as those terms areused in Regulation D) in connection with the offer or sale of any of thePhotogen Shares.

 

4.                                       General.

 

4.1                                 Notices.  All notices, requests, consents and othercommunications under this Agreement shall be in writing and shall be deliveredby hand, by telecopier, by express

 

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overnight courierservice or mailed by first class mail, postage prepaid, to the respectiveaddresses set forth on the signature pages of this Agreement, as such addressesmay be modified by notice given pursuant to this Section 4.1, with copiesprovided simultaneously to counsel as set forth on the signature pages of thisAgreement.  Notices provided inaccordance with this Section 4.1 shall be deemed delivered upon personaldelivery, receipt by telecopy or overnight mail, or 48 hours after deposit inthe mail in accordance with the above.

 

4.2                                 Entire Agreement.  This Agreement, together with theinstruments and other documents hereby contemplated to be executed anddelivered in connection herewith, contains the entire agreement andunderstanding of the parties hereto, and supersedes any prior agreements, negotiations or understandings between or among them, withrespect to the subject matter hereof. Except as expressly set forth in this Agreement, no party makes anyrepresentation or warranty, express or implied, with respect to the transactions contemplated by thisAgreement or any such other agreements. Except as expressly set forth in this Agreement, Photogen makes norepresentation or warranty, express or implied, with respect to the business of Photogen, Photogen, Photogen’sassets or its future prospects (including any of the foregoing with respect toAlliance).  No party is relying on anyunderstandings, agreements or representations other than those expresslycontained in this Agreement or such other written agreements.

 

4.3                              Amendments and Waivers.  This Agreement may only be amended ormodified by a writing dated after the date hereof and signed by the partieshereto.  No waivers of or exceptions toany term, condition or provision of this Agreement, in any one or moreinstances, shall be deemed to be, or construed as, a further or continuingwaiver of any such term, condition or provision.

 

4.4                                 Counterparts.  This Agreement may be executed in several counterparts, each of which shall be deemed an original, butall of which together shall constitute one and the same instrument.

 

4.5                                 Captions.  The captions of the sections, subsectionsand paragraphs of this Agreement have been added for convenience only and shallnot be deemed to be a part of this Agreement.

 

4.6                                 Severability.  Each provision of this Agreement shall beinterpreted in such manner as to validate and give effect thereto to thefullest lawful extent, but if any provision of this Agreement is determined bya court of competent jurisdiction to be invalid or unenforceable underapplicable law, such provision shall be ineffective only to the extent sodetermined and such invalidity or unenforceability shall not affect the remainderof such provision or the remaining provisions of this Agreement.

 

4.7                                 Governing Law.  This Agreement shall be governed by andinterpreted and construed in accordance with the laws of the State of NewYork.  The parties irrevocably submit tothe exclusive jurisdiction of the state and federal courts located in New York,New York for the purpose of any suit, action, proceeding or judgment relatingto or arising out of this Agreement and the transactions contemplated hereby.  Service of process in connection with any

 

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such suit, actionor proceeding may be served on each party hereto anywhere in the world by thesame methods as are specified for the giving of notices under thisAgreement.  The parties irrevocablyconsent to the jurisdiction of any such court in any such suit, action orproceeding and to the laying of venue in such court.  The parties irrevocably waive any objection to the laying ofvenue of any such suit, action or proceeding brought in such courts andirrevocably waive any claim that any such suit, action or proceeding brought inany such court has been brought in an inconvenient forum.

 

4.8                                 Injunctive Relief.  In the event of any breach or threatenedbreach of the provisions of this Agreement by Xmark or its representatives,Photogen shall be entitled to all legal and equitable remedies available to it,and without limiting any other available remedies, Photogen shall be entitledto equitable relief without the necessity of posting a bond, includinginjunction and specific performance.  Nofailure or delay by Photogen in exercising any right, power or privilegehereunder will operate as a waiver thereof, nor will any single or partialexercise thereof preclude any other or further exercise thereof or the exerciseof any right, power or privilege hereunder.  In any action to enforce the provisions of this Agreement, thenon-prevailing party shall pay the reasonable attorneys fees and relatedreasonable costs and expenses incurred by the prevailing party in connectiontherewith.

 

[Next Page is Signature Page.]

 

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INWITNESS WHEREOF, the undersigned have executed this Agreement as of the datefirst above written.

 

 
|   | Xmark  Fund, L.P.              |
|--------|--------------------------------|
|   |                           |
|   |                           |
|   | By:                            | /s/ Mitchell D. Kaye |   |
|   | Its:                           |   |   |
|   | Address:                       | 152  W 57th, 21st FL |
|   |                           | NY   NY 10019 |
|   |                           |
|   |                           |
|   | Xmark  Fund, Ltd.              |
|   |                           |
|   |                           |
|   | By:                            | /s/ Mitchell D. Kaye |   |
|   | Its:                           |   |   |
|   | Address:                       | 152  W 57th, 21st FL |
|   |                           | NY   NY 10019 |
|   |                           |
|   |                           |
|   | Alliance  Pharmaceutical Corp. |
|   |                           |
|   |                           |
|   | By:                            | /s/ Theodore Roth |   |
|   | Its:                           | PRESIDENT & COO |   |
|   | Address:                       | 6175  LUSK BLVD. |
|   |                           | SAN DIEGO CA 92121 |
|   |                           |
|   |                           |
|   | Photogen  Technologies, Inc.   |
|   |                           |
|   |                           |
|   | By:                            | /s/ Taffy Williams |   |
|   | Its:                           | President and CEO |   |
|   | Address:                       | 140 Union SQ. Drive |
|   |                           | New Hope, PA 18938 |
|        |                                |  |  |  |

 

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