Exhibit 10.26




 




AMENDMENT TO THE


8% CONVERTIBLE SECURED NOTE PURCHASE AGREEMENT,


8% CONVERTIBLE SECURED NOTES AND


RELATED SECURITY AGREEMENTS




 




Reference is made to:




 




(i) the 8%

Convertible Secured Notes (the “Notes”) issued by Alliance Pharmaceutical Corp.

(the “Company”) pursuant to that certain 8% Convertible Secured Note Purchase

Agreement (the “Agreement”) among the Company and the purchasers signatory

thereto, dated as of October 4, 2002;




 




(ii) the

Imagent Security Agreement (the “Imagent Security Agreement”), dated as of

October 4, 2002, made by the Company to SDS Merchant Fund, L.P (the

“Collateral Agent”) for the benefit of the holders of the Notes;




 




(iii) the

General Collateral Security Agreement (the “General Collateral Security

Agreement”), dated as of October 4, 2002, made by the Company to the

Collateral Agent for the benefit of the holders of the Notes; and




 




(iv) the

Imagent and Oxygent Patent and Trademark Security Agreement (the “Imagent and

Oxygent Patent and Trademark Security Agreement”), dated as of October 4, 2002,

made by the Company to the Collateral Agent for the benefit of the holders of

the Notes;




 




(v) the

Debenture Imagent Security Agreement (the “Debenture Imagent Security

Agreement”), dated as of October 4, 2002, made by the Company to the parties

signatory thereto;




 




(vi) the

Debenture General Collateral Security Agreement (the “Debenture General

Collateral Security Agreement”) dated as of October 4, 2002, made by the

Company to the parties signatory thereto;




 




(vii) the

Debenture Imagent and Oxygent Patent and Trademark Security Agreement (the

“Debenture Imagent and Oxygen Patent and Trademark Security Agreement,” and,

collectively with the Imagent Security Agreement, the General Collateral

Security Agreement, the Imagent and Oxygen Patent and Trademark Security

Agreement, the Debenture Imagent Security Agreement and the Debenture General

Collateral Security Agreement, the “Security Agreements”), dated as of October

4, 2002, made by the Company to the parties signatory thereto;




 




(viii) the

Intercreditor Agreement (the “Intercreditor Agreement”) dated as of October 4,

2002, among the Collateral Agent, for itself and the holders of the Notes, SDS

Merchant Fund, L.P., Brown Simpson Partners I, L.P., Castle Creek Healthcare

Investors, LLC, CC Life Science, Ltd., and CCL Fund LLC (collectively, the

“Subordinated Debenture Holders”) and the Company; and




 




(ix) the

Intercreditor Agreement (the “Xmark Intercreditor Agreement,” and together with

the Intercreditor Agreement, the “Intercreditor Agreements”), dated as of

October 4,




 





























 




2002, among

the Collateral Agent, for itself and the holders of the Notes, the Company, the

Subordinated Debenture Holders and Xmark Fund, L.P. and Xmark Fund, Ltd. (the

“Senior Leaders”).




 




Capitalized terms used herein

but not otherwise defined shall have the meanings ascribed to them in the

Agreement.




 




In accordance with Section

11(b) of the Agreement, the undersigned, constituting the holders of a majority

of the currently outstanding aggregate principal amounts of the Notes, hereby

agree to amend as of the date hereof, Section 1(b) of the Agreement, and any

reference to the aggregate principal amount of the Notes, to provide that the

aggregate principal amount of the Notes shall not exceed $5,000,000.




 




In accordance with Section 11

of each of the Imagent and Oxygent Patent and Trademark Security Agreement and

the Debenture Imagent and Oxygent Patent and Trademark Security Agreement,

Section 12 of each of the Imagent Security Agreement and the Debenture General

Collateral Security Agreement and Section 13 of each of the General Collateral

Security Agreement and the Debenture Imagent Security Agreement, the

undersigned, constituting the holders a majority of the currently outstanding

aggregate principal amounts of the Notes, hereby agree to amend the second

recital of each of the security Agreements, and any reference to the aggregate

principal amount of the Notes, to provide that the aggregate principal amount

of the Notes shall not exceed $5,000,000.




 




In accordance with Section 4.3

of the Intercreditor Agreement, the undersigned, constituting the Subordinated

Debenture Holders, the Collateral Agent and the Company hereby:




 




(i)     acknowledge that any reference to the

aggregate principal amount of the Notes in the Intercreditor Agreement shall be

amended as of the date hereof to provide that the aggregate principal amount of

the Notes shall not exceed $5,000,000; and




 




(ii)     amend as of the date hereof Section 3.6

of the Intercreditor Agreement, clause (i) to read as follows: “(i) any

increase in the principal amount of the Senior Obligations in excess of

$5,000,000 resulting from the issuance and sale for cash of Notes or Subsequent

Debt (as such term is defined in the Waiver and Consent); and.”




 




In accordance with Section 4.3

of the Xmark Intercreditor Agreement, the undersigned, constituting the

Subordinated Debenture Holders, the Collateral Agent, the Company and the

Senior Lenders hereby:




 




(i)     acknowledge that any reference to the

aggregate principal amount of the Notes in the Xmark Intercreditor Agreement

shall be amended as of the date hereof to provide that the aggregate principal

amount of the Notes shall not exceed $5,000,000; and




 




(ii)     amend as of  the date hereof Section 4.9 of the Xmark Intercreditor Agreement

to read as follows: “Subsequent Debt shall mean, in the event that the

aggregate gross proceeds from the sale of the Notes pursuant to the Convertible

Secured Note Purchase Agreement is less than $5,000,000, the issuance by the

Borrower, in one or a series of transactions, on or prior to January 31, 2003,

of additional securities having substantially the same economic terms as those

set forth in the Notes and the Convertible Secured Note Purchase




 




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Agreement, which transactions,

together with the Notes, results in total gross proceeds of not more than

$5,000,000 to the Borrower.”




 




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IN WITNESS WHEREOF, the

undersigned have caused this Amendment to the 8% Convertible Secured Note

Purchase Agreement, 8% Convertible Secured Notes and Related Security

Agreements to be duly executed by their respective officers duly authorized as

of the day hereof.




 




	

  Dated:

  February 26, 2003


  	

   


  
	

   


  	

   


  
	

   


  	

   


  
	

   


  	

  SDS MERCHANT

  FUND, L.P.


  
	

   


  	

   


  
	

   


  	

  By: 


  	

  /s/ Steve

  Derby


  
	

   


  	

   


  	

  Name: Steve

  Derby


  
	

   


  	

   


  	

  Title:

  Managing Member


  





 




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  PHOTOGEN

  TECHNOLOGIES, INC.


  
	

   


  	

   


  
	

   


  	

   


  
	

   


  	

  By:


  	

  /s/ Taffy

  Williams


  
	

   


  	

   


  	

  Name: Taffy

  Williams


  
	

   


  	

   


  	

  Title:

  President & CEO


  





 




 




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  BROWN

  SIMPSON PARTNERS I, L.P.


  
	

   


  	

   


  
	

   


  	

   


  
	

   


  	

  By:


  	

  /s/ Mitchell

  D. Kaye


  
	

   


  	

   


  	

  Name

  :Mitchell D. Kaye


  
	

   


  	

   


  	

  Title:

  Managing Principal


  





 




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  CASTLE CREEK

  HEALTHCARE


  INVESTORS, LLC


  
	

   


  	

   


  
	

   


  	

   


  
	

   


  	

  By:


  	

  /s/ Thomas

  A. Frei


  
	

   


  	

   


  	

  Name: Thomas

  A. Frei


  
	

   


  	

   


  	

  Title:

  Managing Director


  
	

   


  	

   


  
	

   


  	

   


  
	

   


  	

  CC LIFE

  SCIENCE, LTD.


  
	

   


  	

   


  
	

   


  	

   


  
	

   


  	

  By:


  	

  /s/ Thomas

  A. Frei


  
	

   


  	

   


  	

  Name: Thomas

  A. Frei


  
	

   


  	

   


  	

  Title:

  Managing Director


  
	

   


  	

   


  
	

   


  	

   


  
	

   


  	

  CCL FUND LLC


  
	

   


  	

   


  
	

   


  	

   


  
	

   


  	

  By:


  	

  /s/ Thomas

  A. Frei


  
	

   


  	

   


  	

  Name: Thomas

  A. Frei


  
	

   


  	

   


  	

  Title:

  Managing Director


  





 




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  XMARK FUND,

  L.P.


  
	

   


  	

   


  
	

   


  	

   


  
	

   


  	

  By:


  	

  /s/ Mitchell

  D. Kaye


  
	

   


  	

   


  	

  Name:

  Mitchell D. Kaye


  
	

   


  	

   


  	

  Title: Chief

  Investment Officer


  
	

   


  	

   


  
	

   


  	

   


  
	

   


  	

  XMARK FUND,

  L.P.


  
	

   


  	

   


  
	

   


  	

   


  
	

   


  	

  By:


  	

  /s/ Mitchell

  D. Kaye


  
	

   


  	

   


  	

  Name:

  Mitchell D. Kaye


  
	

   


  	

   


  	

  Title: Chief

  Investment Officer


  





 




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  Acknowledged:


  
	

   


  
	

   


  
	

  ALLIANCE

  PHARMACEUTICAL CORP.


  
	

   


  
	

   


  
	

  By: 


  	

  /s/ Duane J.

  Roth


  	

   


  
	

   


  	

  Name: Duane

  J. Roth


  
	

   


  	

  Title:

  Chairman, Chief Executive Officer and


  Chief Financial Officer


  





 




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