<PAGE>

                              ROYALTY RIGHTS AGREEMENT


               THIS ROYALTY RIGHTS AGREEMENT (this "AGREEMENT") is made and 
entered into as of the August 13, 1998, among Alliance Pharmaceutical Corp., 
a New York corporation (the "COMPANY"), Brown Simpson Strategic Growth Fund, 
L.P., a New York limited partnership ("BROWN SIMPSON LP"), Brown Simpson 
Strategic Growth Fund, Ltd., a Cayman Islands exempt company ("BROWN SIMPSON 
LTD."), Westover Investments L.P., a Delaware limited partnership 
("WESTOVER"), Montrose Investments Ltd., a Cayman Islands exempt company 
("MONTROSE"), and Bay Harbor Investments, Inc., a corporation organized and 
existing under the laws of the British Virgin Islands ("BAY HARBOR").  Brown 
Simpson LP, Brown Simpson Ltd., Westover, Montrose and Bay Harbor are each 
referred to herein as a Purchaser and are collectively referred to herein as 
the Purchasers.

                                      RECITALS

               WHEREAS, this Agreement is made pursuant to the Convertible 
Preferred Stock Purchase Agreement, dated as of the date hereof among the 
Company and the Purchasers (the "PURCHASE AGREEMENT");

               WHEREAS, the Company has developed certain technology concerning 
an intravascular oxygen carrier ("blood substitute") designed to temporarily
augment oxygen delivery in patients (the "OXYGENT TECHNOLOGY");

               WHEREAS, the Company has developed certain technology concerning 
an intrapulmonary agent to reduce a patient's exposure to the harmful effects of
conventional mechanical ventilation (the "LIQUIVENT TECHNOLOGY");

               WHEREAS, the Company has developed certain technology concerning
pharmaceutically active suspension compositions used as a drug delivery platform
for the administration of drugs to the lungs (the "PULMOSPHERES TECHNOLOGY");

               WHEREAS the Company owns or has licensed the entire right, title 
and interest in, to and under United States Patents Nos. 5,628,930, 5,634,461,
5,344,393 and 5,451,205 and all associated foreign counter-parts (if any) which
relate to the Oxygent Technology; 

               WHEREAS the Company owns or has licensed the entire right, title 
and interest in, to and under United States Patents Nos. 5,655,521, 5,590,651,
5,490,498 and 5,437,272 and all associated foreign counter-parts (if any) which
relate to the Liquivent Technology;

               WHEREAS the Company owns or has licensed the entire right, title 
and interest in, to and under United States Provisional Patent Application 
Serial No. 60/060,337 and all associated nonprovisional and foreign 
counter-parts (if any) which relate to the Pulmospheres Technology;

<PAGE>

               WHEREAS, the Purchase Agreement provides, as a condition to the 
Series E-1 Closing (as defined in the Purchase Agreement), that the Company 
and the Purchasers shall enter into and execute this Agreement;

               NOW, THEREFORE, in consideration of the premises and the mutual 
promises, covenants and agreements hereinafter set forth and other good and 
valuable consideration, the receipt and sufficiency of which are hereby 
acknowledged, the parties agree as follows:


                                     ARTICLE I
                                    DEFINITIONS

               Section 1.01.  OXYGENT TECHNOLOGY means that certain technology 
developed by the Company concerning an intravascular oxygen carrier ("blood 
substitute") designed to temporarily augment oxygen delivery in patients, 
including, but not limited to, the subject matter disclosed and claimed in 
United States Patents Nos. 5,628,930, 5,634,461, 5,344,393 and 5,451,205 and 
all associated foreign counter-parts (if any) which relate thereto as well as 
any later filed amendments, continuations, continuations-in-part, divisions, 
reissues, reexaminations, extensions or improvements thereof.

               Section 1.02.  LIQUIVENT TECHNOLOGY means that certain 
technology developed by the Company concerning an intrapulmonary agent to 
reduce a patient's exposure to the harmful effects of conventional mechanical 
ventilation, including but not limited to the subject matter disclosed and 
claimed in United States Patents Nos. 5,655,521, 5,590,651, 5,490,498 and 
5,437,272 and all associated foreign counter-parts (if any) which relate 
thereto as well as any later filed amendments, continuations, 
continuations-in-part, divisions, reissues, reexaminations, extensions or 
improvements thereof.

               Section 1.03.  PULMOSPHERES TECHNOLOGY means that certain 
technology developed by the Company concerning pharmaceutically active 
suspension compositions used as a drug delivery platform for the 
administration of drugs to the lungs, including but not limited to the 
subject matter disclosed and claimed in United States Provisional Patent 
Application No. 60/060,337 and all associated nonprovisional and foreign 
counter-parts (if any) which relate thereto as well as any later filed 
amendments, continuations, continuations-in-part, divisions, reissues, 
reexaminations, extensions or improvements thereof.

               Section 1.04.  "ROYALTY-BEARING PRODUCT" means the first drug 
compound arising out of (i) the OXYGENT TECHNOLOGY, (ii) the LIQUIVENT 
TECHNOLOGY, or (iii) the PULMOSPHERES TECHNOLOGY to gain FDA approval for 
sale in the United States for administration to humans.
               
               Section 1.05.  "FDA" means the U.S. Food and Drug Administration.

               Section 1.06.  "Net Sales" with respect to the Royalty Bearing 
Product means the amount agreed upon by the Company and its licensee or 
sublicensee of the Royalty Bearing Product for purposes of calculating the 
royalties to be paid by the sublicensee to the Company or, if there is 


                                          2
<PAGE>

no licensee or sublicensee of the Royalty Bearing Product, the invoice price of
the Royalty Bearing Product in finished packaged form sold by the Company or,
where applicable, its sublicensees and distributors, to unaffiliated third
parties on a worldwide basis, less (i) all normal and customary trade and
quantity discounts, allowances and rebates, including government rebates such as
Medicaid, given to such third parties; (ii) product returns; (iii) any freight
charges paid by the Company for delivery; and (iv) excise, value added and other
taxes applicable to sales of products which the Company or its distributors have
to pay or absorb on such sales.  In the event that a Royalty Bearing Product is
sold in combination with another product, Net Sales shall be calculated by
multiplying the invoice price of such combination product by the fraction
A/(A+B) where A is the invoice price of the Royalty Bearing Product and B is the
invoice price of the other product.


                                     ARTICLE II
                                     ROYALTIES

               Section 2.01.  ROYALTY.  The Company shall pay to the Purchasers 
a royalty on Net Sales.  Each Purchaser shall receive its pro rata portion of 
each royalty payment pursuant to Section 2.05 of this Agreement.

               Section 2.02.  RATE. 
               
               (a)  Royalties shall be equal to a percentage of Net Sales 
determined as follows:

          (i)   The royalty rate shall be .2% per $5,000,000 of Preferred Stock
     collectively purchased by the Purchasers on the Series E-1 Closing Date,
     Series E-2 Closing Date and Series E-3 Closing Date, pro rated for any
     amounts purchased that are not in even $5 million increments.  (For
     example, if an aggregate of $7,500,000 of Preferred Stock is sold at all
     closings, then the royalty rate computed pursuant to this clause (i) would
     be .3% in the aggregate.)  Notwithstanding the foregoing, if on the Royalty
     Commencement Date (as defined below) the aggregate amount of Preferred
     Stock issued and sold to all Purchasers is not more than $5 million, then
     the royalty rate shall be .25% per $5 million of Preferred Stock purchased
     at all closings, pro rated if the amount purchased is not in even $5
     million increments. The Royalty Rate computed pursuant to this clause (i)
     is referred to as the "BASE ROYALTY RATE."
          
          (ii)  For Purchasers who hold Preferred Stock (or to the extent their
     transferees hold such Preferred Stock) on the first anniversary of the
     Series E-1 Closing Date, the royalty rate shall be retroactively increased
     by .2% per $5,000,000 of Preferred Stock that is outstanding on the first
     anniversary of the Series E-1 Closing Date, pro rated if the amount
     purchased and held is not in even $5 million increments.  Notwithstanding
     the foregoing, if on the Royalty Commencement Date the aggregate amount of
     Preferred Stock issued and sold to all Purchasers is not more than $5
     million, then for Purchasers who hold Preferred Stock (or to the extent
     their transferees hold such Preferred Stock) on the first anniversary of
     the Series E-1 Closing Date the Royalty Rate shall be retroactively
     increased by .25% per $5,000,000 of Preferred Stock that is outstanding on


                                          3
<PAGE>

     the first anniversary of the Series E-1 Closing Date, pro rated if the
     amount outstanding on such first anniversary is not in even $5 million
     increments.  The increase in the Royalty Rate pursuant to this clause (ii)
     is referred to as the "INCREMENTAL ROYALTY RATE."
          
     (b)  Royalties computed and payable based on the Base Royalty Rate shall be
payable to the Purchasers pro rata in accordance with their relative amounts of
Preferred Stock purchased at all closings.  Royalties computed and payable based
on the Incremental Royalty Rate shall be payable to the Purchasers pro rata in
accordance with their relative amounts of Preferred Stock held on the first
anniversary of the Series E-1 Closing.  For purposes of the foregoing, shares
originally purchased by a Purchaser that are held by the Purchaser or by any
other party on such first anniversary shall be deemed to be held by such
Purchaser.

     Section 2.03.  TERM.  Royalties shall be payable for a period of three (3)
years from the date of first commercial sale of the ROYALTY-BEARING PRODUCT in
the United States following FDA approval of the ROYALTY-BEARING PRODUCT (the
"ROYALTY COMMENCEMENT DATE").

     Section 2.04.  REPURCHASE OF ROYALTY OBLIGATION.  The Company shall have
the right, exercisable at any time after all funding permitted or required to be
provided under the Purchase Agreement has been provided, to purchase the
Purchasers' collective rights to receive the royalties specified in this Article
II for an amount computed as follows:
     
     (a)  The aggregate purchase price for all royalties computed at the Base
Royalty Rate shall be, for each $5 million of Preferred Stock purchased at all
closings (pro rated if the aggregate amount purchased at all closings is not in
even $5 million increments), (A) $1.5 million if the repurchase is on or prior
to the third anniversary of the Series E-1 Closing, (B) $2 million if the
repurchase is after the third anniversary and on or prior to the fourth
anniversary of the Series E-1 Closing, and (C) $2.5 million if the repurchase is
after the fourth anniversary of the Series E-1 Closing.  The purchase price
computed and payable pursuant to this subsection (a) shall be payable to the
Purchasers pro rata based on the relative amounts of Preferred Stock purchased
at all closings.
     
     (b)  The aggregate purchase price for all royalties computed at the
Incremental Royalty Rate shall be, for each $5 million of Preferred Stock
outstanding on the first anniversary of the Series E-1 Closing (pro rated if the
aggregate amount so outstanding is not in even $5 million increments), (A) $1.5
million if the repurchase is on or prior to the third anniversary of the Series
E-1 Closing, (B) $2 million if the repurchase is after the third anniversary and
on or prior to the fourth anniversary of the Series E-1 Closing, and (C) $2.5
million if the repurchase is after the fourth anniversary of the Series E-1
Closing.  The purchase price computed and payable pursuant to this subsection
(b) shall be payable to the Purchasers pro rata in accordance with their
relative amounts of Preferred Stock, held on the first anniversary of the Series
E-1 Closing.  For purposes of the foregoing, shares originally purchased by a
Purchaser that are held by the Purchaser or by any other party on such first
anniversary shall be deemed to be held by such Purchaser.

                                          4
<PAGE>

     (c)  Payment of the repurchase price shall be made within thirty days of
notice by the Company to the Purchasers of its election to repurchase all
royalty rights.  Any amounts not paid when due shall bear interest at the rate
of 12% per annum until paid in full.

     Section 2.05.  PAYMENTS.  Payments shall be made to Purchasers within
ninety (90) days after the end of the applicable fiscal year of the Company,
beginning with the first fiscal year ending after the first commercial sale of a
Royalty Bearing Product.  All dollar amounts referred to in this Agreement are
expressed in United States dollars.  All payments to Purchasers under this
Agreement shall be made in United States dollars by check.  If the Company
receives royalties based on Net Sales in currency other than United States
dollars, Net Sales shall be converted into United States dollars at the
conversion rate for the foreign currency which the Company's sublicensee or
distributor, if any, uses to pay royalties based on Net Sales to the Company, or
as published in the eastern edition of THE WALL STREET JOURNAL as of the last
business day of the applicable fiscal year.

     Section 2.06.  ROYALTY CALCULATION REPORTS; AUDITS.  Royalty payments shall
be accompanied by a schedule detailing the calculation of the royalty including
the amount of Net Sales upon which the royalty was calculated and all expenses
deducted.  The Purchasers shall have the right, within six months after a
royalty payment has been made, to have an audit of the books and records of the
Company conducted on their behalf by an independent accounting firm in order to
confirm the calculation of such royalty payment.  The accounting firm shall hold
all information provided to it by the Company confidential and provide to the
Purchasers only the information necessary to confirm the calculation of the
royalty payment.


                                    ARTICLE III
                           REPRESENTATIONS AND WARRANTIES

     Section 3.01.  REPRESENTATIONS AND WARRANTIES OF THE COMPANY.  The Company
represents and warrants solely for the benefit of the Purchasers that as of the
effective date of this Agreement:

     (a)  The Company possesses full power and authority to enter into this
Agreement and to fulfill its obligations hereunder;

     (b)  This Agreement and each of its terms do not conflict with any other
agreement to which the Company is a party or by which it is bound;

     (c)  The Company owns or has licensed the entire right, title and interest
in and to the OXYGENT TECHNOLOGY, the LIQUIVENT TECHNOLOGY and the PULMOSPHERES
TECHNOLOGY; 

     (d)  To the best of the Company's knowledge, the practice of the OXYGENT
TECHNOLOGY, the LIQUIVENT TECHNOLOGY and the PULMOSPHERES TECHNOLOGY does not
infringe upon or conflict with the rights of any third parties;


                                          5
<PAGE>

     (e)  To the best of the Company's knowledge, the Company owns or has the
right to use, all patents, patent applications, trademarks, trademark
applications, service marks, trade names, copyrights, licenses and rights
(collectively, the "INTELLECTUAL PROPERTY RIGHTS") which are necessary for use
in connection with its business, as currently conducted; and

     (f)  No litigation is pending or, to the best of the Company's knowledge
following diligent inquiry, threatened which contains allegations respecting the
validity, enforceability, infringement, misappropriation or ownership of any of
the Intellectual Property Rights, the OXYGENT TECHNOLOGY, the LIQUIVENT
TECHNOLOGY and the PULMOSPHERES TECHNOLOGY.

     Section 3.02.  REPRESENTATIONS AND WARRANTIES OF THE PURCHASERS. The
Purchasers represent and warrant solely for the benefit of the Company that as
of the effective date of this Agreement:

     (a)  the Purchasers possess full power to enter into this Agreement and to
fulfill their obligations hereunder; and

     (b)  This Agreement and each of its terms do not conflict with any other
agreement to which the Purchasers or any of them are a party or by which they or
any of them are bound.


                                     ARTICLE IV
                                  INDEMNIFICATION

     Section 4.01.  THE COMPANY'S AGREEMENT TO INDEMNIFY.  The Company agrees
that it is wholly responsible for all goods and services offered or sold by it
and that the Purchasers shall have no liability for or in connection with the
Company's exploitation of the OXYGENT TECHNOLOGY, the LIQUIVENT TECHNOLOGY and
the PULMOSPHERES TECHNOLOGY including, without limitation, any goods and/or
services offered, sold or otherwise provided by the Company.  Subject to the
terms and conditions of this Agreement, the Company shall indemnify, defend and
hold harmless the Purchasers and each of them, their subsidiaries and their
officers, directors, shareholders, employees and agents (collectively, the
"INDEMNIFIED PARTIES" or individually an "INDEMNIFIED PARTY"), from and against
any and all claims, demands, losses, assessments, fines, penalties, liabilities,
damages, reasonable expenses of investigations, reasonable experts' fees,
reasonable disbursements and other reasonable costs (including reasonable
attorneys' fees) (all of the foregoing hereinafter referred to collectively as
"DAMAGES") asserted against, resulting to, imposed upon or incurred by the
Purchasers and each of them in connection with the Company's exploitation of the
OXYGENT TECHNOLOGY, the LIQUIVENT TECHNOLOGY and the PULMOSPHERES TECHNOLOGY. 
The Indemnified Parties shall promptly notify the Company of any claim or action
giving rise to Damages.  The Company shall have the right to defend any such
claim or action, at its cost and expense.  If the Company fails or declines to
assume the defense of any such claim or action within thirty (30) days after
notice thereof, the Indemnified Parties may assume the defense of such claim or
action for the account and at the expense of the Company, and any Damages
related thereto shall be conclusively deemed a liability of the Company.  The
Company shall pay promptly to the 


                                          6
<PAGE>

Indemnified Parties any Damages to which the foregoing indemnity relates, as
incurred.  Notwithstanding anything to the contrary in this Agreement, the
Company may use one law firm to defend the interest of the Company and all
Indemnified Parties unless it is determined by the law firm defending the
Company, that a conflict of interest actually exists between the Company and any
one or all of the Indemnified Parties.  In such event, the Company shall pay for
counsel to defend the Indemnified Parties as a group, or individually if a
conflict of interest actually exists between any one or more of the Indemnified
Parties.  Any Indemnified Party may retain its own counsel at its own expense.
     
     Section 4.02.  LIMITATION ON DAMAGES.  NEITHER PARTY SHALL BE LIABLE FOR
ANY CONTINGENT, INCIDENTAL, CONSEQUENTIAL, INDIRECT OR SPECIAL, DAMAGE OR
EXPENSE ASSOCIATED WITH THE OXYGENT TECHNOLOGY, THE LIQUIVENT TECHNOLOGY AND THE
PULMOSPHERES TECHNOLOGY PURSUANT TO THIS AGREEMENT FOR ANY REASON WHATSOEVER.


                                     ARTICLE V
                         PATENT PROSECUTION AND MAINTENANCE

     Section 5.01.  PATENT PROSECUTION. During the term of this Agreement, the
Company shall pay any and all fees and expenses associated with the filing and
prosecution of all United States and all corresponding foreign patent
applications (if any) it deems appropriate in the exercise of its business
judgment associated with or relating to the OXYGENT TECHNOLOGY, the LIQUIVENT
TECHNOLOGY and the PULMOSPHERES TECHNOLOGY.

     Section 5.02.  MAINTENANCE OF PATENTS. During the term of this Agreement,
the Company shall pay any and all maintenance fees it deems appropriate in the
exercise of its business judgment to maintain the enforceability of any and all
patents associated with or relating to the OXYGENT TECHNOLOGY, the LIQUIVENT
TECHNOLOGY and the PULMOSPHERES TECHNOLOGY.


                                     ARTICLE VI
                                        TERM

     Section 6.01.  This Agreement shall terminate on December 31, 2003 if there
is no Royalty Bearing Product in existence or upon the expiration of the
Company's obligation to pay any royalties to Purchasers hereunder.


                                    ARTICLE VII
                                   MISCELLANEOUS

     Section 7.01.  ASSIGNMENT. The Company may not assign, transfer, delegate
or divest itself of its rights and obligations hereunder, without prior written
approval by each of the Purchasers.


                                          7
<PAGE>

     Section 7.02.  BINDING AGREEMENT. This Agreement shall be binding upon all
parties hereto, their heirs, legal representatives, successors and permitted
assigns.

     Section 7.03.  ENTIRE AGREEMENT.  This Agreement together with the Purchase
Agreement and the Registration Rights Agreement constitute the entire agreement
of the parties with respect to the subject matter hereof and may not be modified
or amended except by a writing duly executed by all parties hereto.

     Section 7.04.  SEVERABILITY.  If any provision of this Agreement shall be
held invalid or unenforceable, such invalidity or unenforceability shall attach
only to such provision and shall not in any manner affect or render invalid or
unenforceable any other severable provision of this Agreement, and this
Agreement shall be carried out as if any such invalid or unenforceable provision
were not contained herein.

     Section 7.05.  HEADINGS.  The paragraph headings contained herein are for
the purpose of convenience only and are not intended to define or limit the
contents of said paragraphs.

     Section 7.06.  GOVERNING LAW.  This Agreement shall be governed by and
construed in accordance with the laws of the State of New York, without regard
to principles of conflicts of law.

     Section 7.07.  NOTICES.  All notices or demands of any kind which may be
required to be served under the terms of this Agreement shall be in writing and
shall be deemed served when personally delivered or when received by mail,
postage prepaid priority, registered, certified mail, or by recognized courier
service, addressed as follows:

TO THE COMPANY:     Alliance Pharmaceutical Corp.
                    3040 Science Park Road
                    San Diego, CA  92121
                    Attn.:  Theodore D. Roth
                    Fax.:  (619) 558-5306

                    Alliance Pharmaceutical Corp.
                    3040 Science Park Road
                    San Diego, CA  92121
                    Attn.:  Lloyd A. Rowland
                    Fax.:  (619) 678-4133

TO PURCHASERS:      Brown Simpson Strategic Growth Fund, L.P.
                    152 West 57th Street, 40th Floor
                    New York, New York  10019
                    Attn.:  Mitchell D. Kaye
                    Fax:  (212) 247-1329

                    Brown Simpson Strategic Growth Fund, Ltd.


                                          8
<PAGE>

                    152 West 57th Street, 40th Floor
                    New York, New York  10019
                    Attn.:  Mitchell D. Kaye
                    Fax:  (212) 247-1329

                    Westover Investments L.P.
                    300 Crescent Court, Suite 700
                    Dallas, Texas 75201
                    Attn.:  Will Rose
                    Fax:  (214) 758-1221

                    Montrose Investments Ltd. 
                    300 Crescent Court, Suite 700
                    Dallas, Texas 75201
                    Attn.:  Will Rose
                    Fax:  (214) 758-1221

                    Bay Harbor Investments, Inc. 
                    C/o Trippoak Advisors, Inc.
                    630 Fifth Avenue, Suite 2000
                    New York, NY 10111
                    Attn.:  Robert Miller
                    Fax:  (212) 332-3256
                    
                    With copies to:
                    
                    Robinson Silverman Pearce Aronson & Berman, LLP
                    1290 Avenue of the Americas
                    New York, NY 10104
                    Attn:  Kenneth L. Henderson
                    Fax:  (212) 541-4630

     Any party may change the address set forth herein by giving written notice
of said change to all other parties.

     Section 7.08.  NO AGENCY.  Nothing contained in this Agreement shall create
a joint venture, partnership or agency relationship between the parties hereto.


                 [REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK.
                              SIGNATURE PAGE FOLLOWS.] 


                                          9

<PAGE>

     IN WITNESS WHEREOF, the parties have executed this Agreement as of the day
and year first written above.

                              ALLIANCE PHARMACEUTICAL CORP.

                              By:
                                 --------------------------------------------
                              Name:     Theodore D. Roth
                              Title:    President and Chief Operating Officer


                              BROWN SIMPSON STRATEGIC
                              GROWTH FUND, L.P.


                              By:
                                 --------------------------------------------
                              Name:
                              Title:


                              BROWN SIMPSON STRATEGIC
                              GROWTH FUND, LTD.


                              By:
                                 --------------------------------------------
                              Name:
                              Title:


                              WESTOVER INVESTMENTS L.P.


                              By:
                                 --------------------------------------------
                              Name:
                              Title:


                              MONTROSE INVESTMENTS LTD. 


                              By:
                                 --------------------------------------------
                              Name:
                              Title:


                              BAY HARBOR INVESTMENTS, INC. 


                              By:
                                 --------------------------------------------
                              Name:
                              Title:


                                          10