<PAGE>


                                                                    Exhibit 10.2


                        SETTLEMENT AND RELEASE AGREEMENT

         This SETTLEMENT and RELEASE AGREEMENT is made and entered into as of
September 25, 2001 (the "effective date") by BRACCO IMAGING S.P.A., an Italian
corporation having a principal place of business at Via Egidio Folli, n. 50,
20134 Milan, Italy ("Bracco"); THE GENERAL HOSPITAL CORPORATION, a Massachusetts
corporation, having a principal place of business at 55 Fruit Street, Boston, MA
02129-2000, USA ("GH"); and EPIX MEDICAL, INC., a Delaware corporation, having a
principal place of business at 71 Rogers Street, Cambridge, MA 02142, USA
("EPIX"). Bracco, GH and EPIX may each be referred to separately as a "Party" or
collectively as the "Parties."

                                    RECITALS

         WHEREAS, Bracco is using, manufacturing, selling, offering to sell,
importing, exporting and/or distributing a pharmaceutical imaging agent
identified by the trademark "MultiHance(TM)" in certain countries, and is
seeking approval from regulatory authorities for eventual distribution of
"MultiHance(TM)" in the United States, and is interested in the worldwide
distribution of "MultiHance(TM)"; and

         WHEREAS, The General Hospital Corporation, which is doing business as
Massachusetts General Hospital ("GH"), owns certain patents and patent
applications related to imaging agents such as the Licensed Product; and

         WHEREAS, EPIX has certain rights under those patents and patent
applications owned by GH (the "Licensed Patents"), pursuant to an Amended and
Restated License Agreement dated July 10, 1995, as amended, between EPIX and GH


<PAGE>

("EPIX/GH Agreement"), including rights to obtain, enforce, defend and
sublicense those patents; and

         WHEREAS, EPIX and GH have initiated litigation for infringement of one
of GH's patents in France against Bracco S.p.A. located in Via Egidio Folli 50,
20134 Milan, Italy and against Laboratoires Byk France S.A., 593 route de
Boissise, 773 50 Le Mee-sur-Seine for sales of MultiHance; and

         WHEREAS, EPIX and GH have initiated litigation for infringement of one
of GH's patents in Germany against Bracco-Byk Gulden GmbH, Max-Stromeyer-Str.
57, 78467 Konstanz, Germany and against Byk Gulden Lomberg Chemische Fabrik
GmbH, Byk-Gulden Str. 2, 78467 Konstanz, Germany and against certain managers
and representatives of those companies for sales of MultiHance; and

         WHEREAS, Bracco and/or its Affiliates and the Named Entities, including
Bracco S.p.A. in the person of its Chief Executive Officer and legal
representative Dr. Diana Bracco; Laboratoires Byk France S.A. with seat in Le
Mee-sur-Seine (France), Route de Boissise 593, in the persons of its legal
representatives Mr. Klaus Rath and Mr. Jean Husson; BYK Nederland B.V. with seat
in Zwanenburg (Holland), 1161 AG Weerenweg 29 in the person of its legal
representative and financial director Mr. Jan HermanTimmermans; Byk Gulden
Lomberg Chemische Fabrik GmbH., with seat in Konstanz (Germany), Byk Gulden Str.
2, in the persons of its legal representatives Professor Heinz W. Radtke and Dr.
Herbert Suchy; Bracco-Byk Gulden GmbH with seat in Konstanz (Germany),
Max-Stromeyer-Str. 57, in the person of its legal representative Dr. Astrid
Seeberg; E. Merck Ltd. with seat in Middlesex (Great Britain), Harrier House,
High Street West Drayton UB7 7QG in the person of its legal representative Mr.
John


                                      -2-
<PAGE>

Vass; Sintetica S.A. with seat in Mendrision (Switzerland), San Martino via
Penate 5 in the persons of its legal representatives Dr. Antonio Gelmetti and
Professor Ernst Felder; Astra Tech AB. with seat in Molndal (Sweden), Aminogatan
1, in the person of its legal representative Mr. Gosta Wennerstrom; Bracco
International B.V. with seat in Amsterdam (Holland), 1077 ZX, Strawinsky Laan
3051 in the persons of its legal representatives Mr. Gea van Estrik and Mr. Tom
Herbschleb; Gerot Pharmazeutica Ges.m.b.H. with seat in Vienna (Austria),
Amethgasse 3, in the person of its legal representative Dr. Franco Mamoli; Byk
Belga SA. with seat in Brussels (Belgium) via Anatole France 115-12, in the
persons of its legal representatives Dr. Eddy Tordeur and Mr. Gerard Ameels;
have initiated litigation for a declaration of non-infringement and for nullity
of one of GH's patents in Italy against EPIX and GH; and

         WHEREAS, Bracco and/or its Affiliate Bracco S.p.A. has requested
revocation of one of GH's patents in the courts of the United Kingdom against
GH; and

         WHEREAS, Bracco and/or its Affiliates including Bracco S.p.A. and Byk
Gulden Lomberg Chemische Fabrik GmbH have opposed one of GH's patents in the
European Patent Office and have appealed the decision of the Opposition Division
confirming the validity of that patent; and

         WHEREAS, Bracco and/or its Affiliates including Bracco Research
Associate Anonyme have opposed one of GH's patents in the Japanese Patent
Office; and

         WHEREAS, Bracco, GH and EPIX intend to enter into an agreement that,
with regard to the Licensed Patents and Licensed Products, is intended to avoid
further expenditure of financial, managerial and other resources and to resolve
any and all current intellectual property disputes pertaining to Licensed
Patents and Licensed


                                      -3-
<PAGE>

Products without resort to further litigation by entering into this Settlement
and Release Agreement ("S/R Agreement") and to make other agreements in
connection with this S/R Agreement, including a Worldwide License Agreement to
be executed simultaneously with the S/R Agreement; and

         WHEREAS, EPIX is willing to grant Bracco a worldwide nonexclusive
sublicense under the Licensed Patents; and

         WHEREAS, Bracco is willing to obtain from EPIX a worldwide nonexclusive
sublicense under the Licensed Patents; and

         NOW, THEREFORE, in consideration of the foregoing and the mutual
covenants and promises contained in this S/R Agreement, the Parties hereto agree
as follows:

                                    ARTICLE 1

                                   DEFINITIONS

         For purposes of this S/R Agreement, the terms defined in this Article
shall have the meanings specified below. These terms are intended to encompass
both the singular and plural forms.

         1.1 "AFFILIATE" shall mean a corporation or other legal entity that
controls, is controlled by, or is under common control with a Party to this S/R
Agreement. For purposes of this definition, "control" means the ownership,
directly or indirectly, of more than fifty percent (50%) of the outstanding
equity securities of a corporation which are entitled to vote in the election of
directors or more than fifty percent (50%) interest in the net assets or profits
of an entity which is not a corporation. For the purposes of this definition,
Bracco Affiliates shall include, without limitation, those Affiliates that are,
or will become, sublicensees under the Worldwide License Agreement and shall
initially include the entities identified on Exhibit 1 and any future similarly
organized Bracco Affiliates.


                                      -4-
<PAGE>

         1.2 "BRACCO" shall mean Bracco identified as a Party above.

         1.3 "EPIX" shall mean EPIX identified as a Party above and any EPIX
Affiliate.

         1.4 "EPIX/GH AGREEMENT" shall mean the Amended and Restated License
Agreement dated July 10, 1995, as amended, between EPIX and GH providing rights
to EPIX to obtain, enforce, defend and sublicense patents owned by GH.

         1.5 "GH" shall mean GH identified as a Party above.

         1.6 "LICENSED PATENTS" shall mean all patents and patent applications
owned by GH listed on Exhibit 2 of this S/R Agreement and licensed to EPIX under
the EPIX/GH Agreement, including any division, renewal, continuation,
continuation-in-part, extension, reissue, reexamination, substitution,
confirmation, registration, revalidation, supplementary protection certificate
or any extension or additions thereto.

         1.7 "EPIX PATENTS" shall mean any and all patents and patent
applications covering the Licensed Products, other than the Licensed Patents,
that are currently or may hereafter be owned, obtained, acquired, purchased by
or licensed to, with a right to sublicense, or in any way under the control or
at the disposal of EPIX, including any division, renewal, continuation,
continuation-in-part, extension, reissue, reexamination, substitution,
confirmation, registration, revalidation, supplementary protection certificate
or any extension or additions thereto.

         1.8 "LICENSED PRODUCTS" shall mean any pharmaceutical product or
formulation sold by Bracco or its Affiliates comprising the drug substance
having the


                                      -5-
<PAGE>

chemical name (4-carboxy-5, 8, 11-tris (carboxymethyl)-1-phenyl-2-oxa-5, 8,
11-triazatridecan-13-oato (5-)) gadolinate (2-) dihydrogen, including but not
limited to the product identified by Bracco's trademark "MultiHance" and having
the CAS Registry Number 127000-20-8; and intermediates used in making, methods
of preparing and methods of using such product or formulation, that, absent the
license provided in the Worldwide License Agreement, would be an infringement of
a Valid Claim of the Licensed Patents.

         1.9 "NAMED ENTITIES" shall mean those entities involved in the
actions/disputes described in Exhibit 4 of this S/R Agreement, excluding EPIX
and GH.

         1.10 "PARTY" or "PARTIES" shall mean Bracco, GH or EPIX individually or
together.

         1.11 "S/R AGREEMENT" shall mean this Settlement and Release Agreement
entered into by GH, EPIX and Bracco as of its effective date.

         1.12 "TERRITORY" shall mean any country in the world in which a
Licensed Patent has issued and a Valid Claim is in effect. Exhibit 5 lists the
countries in which a Licensed Patent has issued with reference to the time of
execution of this Agreement.

         1.13 "THIRD PARTY" shall mean any entity other than GH, EPIX, Bracco or
a Bracco Affiliate.

         1.14 "VALID CLAIM" shall mean a claim in an issued, unexpired patent
that is a Licensed Patent, that, absent the license provided in the Worldwide
License Agreement, would be infringed by the Licensed Products, that (i) has not
been finally cancelled, withdrawn, abandoned or rejected by any administrative
agency or other body of competent jurisdiction, (ii) has not been revoked, held
invalid, or declared unpatentable


                                      -6-
<PAGE>

or unenforceable in a decision of a court or other body of competent
jurisdiction that is unappealable or unappealed within the time allowed for
appeal, (iii) has not been rendered unenforceable through disclaimer or
otherwise, or (iv) is not lost through an interference proceeding.

         1.15 "WORLDWIDE LICENSE AGREEMENT" shall mean the Worldwide License
Agreement between Bracco and EPIX, as of its effective date, which is to be
executed in conjunction with this S/R Agreement.


                                      -7-
<PAGE>


                                   ARTICLE 2

       WORLDWIDE SETTLEMENT AND RELEASE OF INTELLECTUAL PROPERTY DISPUTES

         2.1 SETTLEMENT OF DISPUTES. In order to compromise, settle, and
terminate in their entirety any intellectual property disputes now pending
worldwide pertaining to the Licensed Patents and/or the Licensed Products, the
Parties undertake to act in accordance with the following promises:

         (i) Within ten (10) days of the execution of this S/R Agreement, Bracco
and/or its Affiliates shall execute and timely file all documents necessary to
terminate in their entirety all current actions or legal proceedings instituted
by the Named Entities in the United Kingdom, Italy, the European Patent Office,
the Japanese Patent Office and any other territory against the Licensed Patents,
such documents to be executed and timely filed by Bracco and/or its appropriate
Affiliate, and Bracco shall bear all court costs or other fees incurred thereby,
with the understanding that each Party shall bear its own attorneys' fees and
costs with respect to such actions and their termination and without application
for reimbursement for court costs or fees from any Party; such termination
request to be in a form agreed to by the Parties in substantially the same form
as set forth in Exhibit 3 of this S/R Agreement. Any failure to terminate in its
entirety any one of these legal proceedings instituted by Bracco or any other
Named Entity will be considered to be a material breach of this S/R Agreement.

         (ii) Within ten (10) days of the execution of this S/R Agreement, EPIX
and GH shall execute and timely file all documents necessary to terminate in
their entirety all current actions or legal proceedings in France, Germany and
any other territory brought in relation to the Licensed Products against Bracco,
and EPIX and GH shall bear all court


                                      -8-
<PAGE>

costs or other fees incurred thereby, with the understanding that each Party
shall bear its own attorneys' fees and costs with respect to such actions and
their termination and without application for reimbursement for court costs or
fees from any Party; such termination request to be in a form agreed to by the
Parties in substantially the same form as set forth in Exhibit 3 of this S/R
Agreement. Any failure to terminate in its entirety any one of these legal
proceedings as listed in Exhibit 4 will be considered to be a material breach of
this S/R Agreement.

         2.2 EXECUTION OF AGREEMENTS AND OTHER PAPERS. Simultaneously with the
execution of this S/R Agreement, EPIX and Bracco shall execute the Worldwide
License Agreement related to the Licensed Products, Licensed Patents and
financial considerations described in that Agreement. Any failure to execute
that Agreement and pay all monies in accordance with the terms and conditions
described therein will be considered to be a material breach of this S/R
Agreement. All Parties shall cooperate and execute all necessary papers to
terminate all of the legal proceedings as listed in Exhibit 4 in accordance with
the terms of Section 2.1 of this S/R Agreement.

         2.3 RELEASE. The execution of this S/R Agreement and the Worldwide
License Agreement constitutes a mutual release and satisfaction of all prior
claims between the Parties thereto with respect to the sale of Licensed
Products. Except with respect to obligations or rights created by or arising out
of this S/R Agreement and the Worldwide License Agreement herewith, the Named
Entities, on one side, GH and EPIX, on the other side, hereby release and
forever discharge each other and their respective predecessors, successors,
assignees, employees, shareholders, officers, directors, agents, subsidiaries,
from any and all claims, demands, causes of action, obligations, damages,


                                      -9-
<PAGE>

costs, expenses, attorney's fees and liabilities of any nature whatsoever
whether or not now known, suspected or claimed which the Parties had, have or
may have against one another with respect to the Licensed Patents and the
Licensed Products based upon events occurring prior to the effective date of
this S/R Agreement.

         2.4 SURVIVAL. Subject to the last sentence of this Section 2.4 below,
the obligations, rights and agreements of this Article 2 shall survive and
remain in effect notwithstanding the termination of this S/R Agreement for any
reason, except for material breach by any Party of this S/R Agreement or the
Worldwide License Agreement executed herewith. Failure by Bracco to pay monies
or royalties when due will be regarded as a material breach of this S/R
Agreement. GH acknowledges and agrees that, except for a breach of the S/R
Agreement or of the Worldwide License Agreement by Bracco, GH shall continue the
Worldwide License Agreement granted to Bracco under the Licensed Patents for the
Licensed Products in the event that the EPIX/GH Agreement is terminated,
PROVIDED THAT Bracco agrees to assume all insurance obligations set forth in the
EPIX/GH Agreement, unless the Worldwide License Agreement has been terminated
prior thereto in accordance with its terms and conditions.

         2.5 NO ASSIGNMENT. The Parties warrant that they have made no
assignment, and will make no assignment, of any claim, chose in action, right of
action, or any right of any kind whatsoever, embodied in any of the claims and
allegations made in any pending dispute identified herein.


                                      -10-
<PAGE>

                                    ARTICLE 3

                         WARRANTIES AND REPRESENTATIONS

         3.1 Each Party makes the following warranties and representations to
each of the other Parties:

         (i)      CORPORATE POWER. Each Party is a corporation duly organized,
                  validly existing and in good standing under the laws of the
                  state or country in which it is organized and has all
                  requisite power and authority to enter into and perform this
                  S/R Agreement and the transactions contemplated hereby and to
                  require its Affiliates to abide by its terms and conditions.

         (ii)     DUE AUTHORIZATION. The execution, delivery and performance of
                  this S/R Agreement have been duly authorized by all necessary
                  corporate action on the part of each Party; no consent of any
                  Third Party is needed to enter into this S/R Agreement.

         (iii)    BINDING AGREEMENT. This S/R Agreement is and shall be a legal
                  and valid obligation binding upon each of the Parties,
                  enforceable in accordance with their respective terms.

         (iv)     NO CONFLICT. None of the Parties has or will enter into any
                  agreement that would interfere with the rights, licenses and
                  privileges granted under this S/R Agreement. The execution,
                  delivery and performance of this S/R Agreement and the
                  consummation of the transactions contemplated hereby do not
                  and will not violate the provisions of any Party's certificate
                  of incorporation or bylaws or similar type documents or the
                  provisions of any note, lease, license permit or other
                  instrument or obligation or violate any


                                      -11-
<PAGE>

                  law, order, rule or regulation applicable to it or conflict
                  with any agreement, instrument or understanding, oral or
                  written, to which it is a Party or by which it may be bound,
                  nor violate any material law or regulation of any court,
                  governmental body or administrative or other agency having
                  jurisdiction over it.

         3.2 GH'S WARRANTIES & REPRESENTATIONS. GH represents and warrants that:

         (i)      it owns and has good, valid, right, title and interest in the
                  Licensed Patents and, subject to the rights of the U.S.
                  Government under 35 U.S.C ss.ss. 202, et seq., has given the
                  exclusive right to license such Licensed Patents to EPIX free
                  and clear of mortgages, charges and encumbrances of any nature
                  whatsoever, including EPIX' right to grant sublicenses;

         (ii)     it has not assigned, conveyed or otherwise encumbered, and
                  will not do so for the life of this S/R Agreement by any
                  written or oral agreement or otherwise, any right, title or
                  interest in the Licensed Patents in a way that would preclude,
                  diminish or limit either EPIX' or Bracco's ability to use the
                  Licensed Patents to practice, exploit and benefit from the
                  manufacture, use or sale of the Licensed Products;

         (iii)    to the best of its knowledge after reasonable inquiry, no
                  person has asserted or made any claim or challenge to GH's
                  right to license the Licensed Patents to EPIX or any claim or
                  challenge to EPIX' right to sublicense the Licensed Patents;

         (iv)     it has not transferred any rights in any of the currently
                  pending litigations or oppositions to another entity, that it
                  will not apply for or request from


                                      -12-
<PAGE>

                  Bracco, its Affiliates, any Named Entity or any other legal
                  body any reimbursement of legal fees or court costs related to
                  any legal proceeding described herein and agrees to abide by
                  its promises and agreements described in Article 2;

         (v)      to the best of its knowledge, it has made a full, complete and
                  accurate disclosure of all non-privileged written material in
                  its possession and not publicly available regarding the
                  ownership, validity and enforceability of the Licensed Patents
                  to EPIX; and

         (vi)     to the best of its knowledge, it has no patents or pending
                  applications covering the Licensed Products other than the
                  Licensed Patents and hereinafter, to the extent that such
                  patents or pending applications are found or acquired, GH
                  shall refrain from asserting such patents or applications
                  against Bracco, its Affiliates or their distributors and
                  customers as long as Bracco is making payments pursuant to the
                  Worldwide License Agreement.

         3.3 EPIX' WARRANTIES & REPRESENTATIONS. EPIX represents and warrants
that:

         (i)      it has a valid interest in the Licensed Patents and, subject
                  to the rights of the U.S. Government under 35 U.S. C.ss.ss.202
                  et seq., has the exclusive right to sublicense such Licensed
                  Patents to other entities, including Bracco;

         (ii)     it has not assigned, conveyed or otherwise encumbered and will
                  not do so for the life of this S/R Agreement by any written or
                  oral agreement or otherwise any interest in the Licensed
                  Patents or the EPIX Patents in a


                                      -13-
<PAGE>

                  way that would preclude, diminish or limit Bracco's ability to
                  use the Licensed Patents or the EPIX Patents to practice,
                  exploit and benefit from the manufacture, use or sale of
                  Licensed Products;

         (iii)    to its knowledge after reasonable inquiry, no person has
                  asserted or made any claim or challenge to GH's right to
                  license the Licensed Patents to EPIX or any claim or challenge
                  to EPIX' right to sublicense the Licensed Patents;

         (iv)     it has not transferred any rights in any of the currently
                  pending litigations or oppositions to another entity, that it
                  will not apply for or request from Bracco, its Affiliates, any
                  Named Entity or any other legal body any reimbursement of
                  legal fees or court costs related to any legal proceeding
                  described herein and agrees to abide by its promises and
                  agreements described in Article 2;

         (v)      it has made a full, complete and accurate disclosure of all
                  non-privileged written material in its possession and not
                  publicly available regarding the ownership, validity and
                  enforceability of the Licensed Patents to Bracco; and

         (vi)     it has no patents or patent applications pending or issued or
                  license rights that cover the formulations of the Licensed
                  Products, nor, to the best of its knowledge, intermediates
                  used in making Licensed Products, methods of preparing
                  Licensed Products or methods of using Licensed Products for
                  magnetic resonance imaging the liver or central nervous system
                  other than those set forth on Exhibit 2 hereof.


                                      -14-
<PAGE>

         3.4 BRACCO'S WARRANTIES & REPRESENTATIONS. Bracco represents and
warrants that:

         (i)      it has the authority to act and execute this S/R Agreement on
                  behalf of itself and its Affiliates and has the authority to
                  terminate in their entirety all litigations or actions in
                  disputes with EPIX and GH on behalf of itself and its
                  Affiliates;

         (ii)     it has disclosed and will disclose to EPIX all claims or
                  challenges by Third Parties to the validity, enforcement or
                  infringement of the Licensed Patents in the Territory; and

         (iii)    it has not transferred any rights in any of the currently
                  pending litigations or oppositions to an Affiliate or another
                  entity, that neither Bracco nor any other Named Entity will
                  apply for or request from EPIX, GH or any legal body any
                  reimbursement of legal fees or court costs related to any
                  legal proceeding described herein, and Bracco agrees to abide
                  by its promises and agreements described in Article 2.

                                    ARTICLE 4

                                 CONFIDENTIALITY

         4.1 During the term of this S/R Agreement and for a period of five (5)
years following the expiration or earlier termination hereof, each Party shall
maintain in confidence the information received by any other Party, including
but not limited to that relating to the terms and conditions of this S/R
Agreement, and shall not disclose, use or grant the use of such information of
the other Party, except on a need-to-know basis to such Party's or its
Affiliates' directors, officers and employees, and such Party's


                                      -15-
<PAGE>

consultants and collaborators, to the extent such disclosure is reasonably
necessary in connection with such Party's activities as expressly authorized by
this S/R Agreement. To the extent that disclosure to any person is authorized by
this S/R Agreement, prior to disclosure, a Party shall advise such person of the
confidential nature of such information and not to disclose, use or grant the
use of the information of the other Party except as expressly permitted under
this S/R Agreement. The confidentiality obligations under this Section 4.1 shall
not apply to the extent that a Party is required to disclose information by
applicable law, regulation or order of a governmental agency or a court of
competent jurisdiction.

         4.2 The Parties agree that press releases and other announcements to be
made by them in relation to this S/R Agreement shall be subject to the written
consent of the other Parties, which consent shall not be unreasonably withheld
or delayed, except to the extent that any such press release is required to be
made by law and the consent of the other Parties is not obtained after
reasonable efforts to do so. EPIX intends to issue a press release immediately
following the execution of this S/R Agreement, the form and content of which is
substantially similar to the one attached hereto as Exhibit 6 of the S/R
Agreement.

                                    ARTICLE 5

                            DURATION AND TERMINATION

         5.1 DURATION. This S/R Agreement shall come into effect as of the
effective date and shall remain in full force and effect until the date of
expiration of the last to expire of any Valid Claim under the Licensed Patents
in each country.


                                      -16-
<PAGE>

         5.2 TERMINATION OF THIS S/R AGREEMENT. This S/R Agreement may be
terminated by either EPIX or Bracco upon thirty (30) days notice in the event of
(i) a material breach by the other Party or (ii) bankruptcy, insolvency,
dissolution or winding up of the other Party (a "Bankruptcy Event"), except, in
the case of a petition in bankruptcy filed involuntarily against a Party, if
such petition is dismissed within sixty (60) days of the date of its filing. No
Party shall have the right to terminate this S/R Agreement for a material breach
without first giving written notice to the other Party setting forth in such
notice the details of the material breach and giving such other Party the right
to cure such breach within thirty (30) days, or ten (10) days in the case of a
failure to make a payment on time, to cure such breach. In the event that such
other Party believes that the breach set forth in the notice has not occurred or
is not a material breach, such other Party shall give written notice to the
notifying Party of the basis for its position within such thirty (30) day
period. In the event there is a dispute between the parties as to whether a
breach has occurred, no Party shall have the right to terminate this S/R
Agreement without first following the procedures for dispute resolution set
forth in Sections 6.4, 6.5 or 6.6. In no event shall any dispute as to the
infringement of a Valid Claim of any Licensed Patent in any country or as to the
validity or enforceability of a Valid Claim of any Licensed Patent be deemed a
material breach of this S/R Agreement.

         5.3 CONSEQUENCES OF TERMINATION OF S/R AGREEMENT.

             5.3.1 EFFECT OF TERMINATION BY EPIX. In the event that this S/R
Agreement is terminated by EPIX pursuant to breach of Section 2, breach of
Section 3.1 or 3.4 or pursuant to Section 5.2(ii), EPIX shall be entitled to
claim from Bracco in a


                                      -17-
<PAGE>

court of competent jurisdiction all damages or other relief which would
otherwise be available to EPIX at law or in equity.

             5.3.2 EFFECT OF TERMINATION BY BRACCO. In the event that this S/R
Agreement is terminated by Bracco pursuant to breach of Section 2, breach of
Section 3.2 or 3.3 or pursuant to Section 5.2(ii), Bracco shall be entitled to
claim from EPIX in a court of competent jurisdiction all damages or other relief
which would otherwise be available to Bracco at law or in equity.

         5.4 SURVIVAL. The following Sections shall survive termination of the
S/R Agreement: all clauses of Articles 2, 3, 4, 5.3, 6.1, 6.2, 6.4, 6.5, 6.6,
6.7, 6.8, 6.11 and 6.12.

                                    ARTICLE 6

                                  MISCELLANEOUS

         6.1 NOTICES. All notices required pursuant to this S/R Agreement shall
be in writing and shall be deemed to have been duly given upon the date of
receipt if delivered by hand, international overnight courier, confirmed
facsimile transmission for documents other than with respect to service of
process, or registered or certified mail (return receipt requested, postage
prepaid) to the following addresses:

                  If to GH:          The General Hospital Corporation
                                     Building 149, 13th Street, Suite 5036
                                     Charlestown, MA 02109
                                     Attention: Director,
                                     Corporate Sponsored Research And Licensing

                  If to EPIX:        EPIX Medical, Inc.
                                     71 Rogers Street
                                     Cambridge, MA 02142-1118
                                     Attention: Chief Executive Officer
                                     Facsimile: 617- 250-6031


                                      -18-
<PAGE>

                  With a copy to:    Mintz, Levin, et al.
                                     One Financial Center
                                     Boston, MA 02111
                                     Attention: William T. Whelan, Esq.
                                     Facsimile: 617-542-2241

                  If to Bracco:      Bracco S.p.A.
                                     Via E. Folli 50
                                     20134 Milan
                                     Attention: Group Business Development
                                     Facsimile: 011-39-02-2177-2781

                  With a copy to:    Kramer Levin Frankel & Naftalis
                                     919 Third Avenue
                                     New York, New York 10022
                                     Attention: Nicholas L. Coch, Esq.
                                     Facsimile: 212.715.8000

Any Party may change its designated address and facsimile number by notice to
the other Parties in the manner provided in this Section. Service of process by
confirmed facsimile transmission is not permitted.

         6.2 ASSIGNMENT. This S/R Agreement may not be assigned by any Party
without the prior written consent of the other Parties, except that any Party
may assign this S/R Agreement to any of its Affiliates or to a successor in
connection with the merger, consolidation, or sale of all or substantially all
of its assets or that portion of its business pertaining to the subject matter
of the S/R Agreement, with prompt written notice to the other Parties of any
such assignment. This S/R Agreement shall inure to the benefit of and be binding
upon the Parties and their respective lawful successors and assignees.

         6.3 FORCE MAJEURE. No Party shall be held liable or responsible to the
other Parties nor be deemed to have defaulted under or breached this S/R
Agreement for failure or delay in performing any term of this S/R Agreement when
such failure or delay is


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<PAGE>

caused by or results from causes beyond the reasonable control of the affected
Party, including but not limited to fire, floods, embargoes, war, acts of war
(whether war is declared or not), riots, strikes, lockouts or other labor
disturbances, lawsuits, acts of God, or acts, omissions or delays in acting by
any court, governmental authority or any other Party.

         6.4 ARBITRATION CLAUSE. In the event of a dispute between the Parties
arising out of or in connection with this S/R Agreement, the appropriate
officers or managers of the Parties shall meet within thirty (30) days after
notice of such dispute in a first attempt to settle through good faith
negotiations. In the event the Parties are unable to resolve such dispute, upon
the mutual consent of the Parties, such dispute may be finally settled by and
remanded to the exclusive jurisdiction of the American Arbitration Association
and a panel of three Arbitrators, appointed one by Bracco and one by EPIX and GH
together, and a third who is appointed by agreement of the first two Arbitrators
or, in the absence of such agreement, by the American Arbitration Association,
who shall act as President. The Party raising the dispute shall request the
arbitration and shall notify the other Party at the same time of the name of its
own appointed Arbitrator as provided for herein. The Party receiving such
request and notice shall within 30 (thirty) days of said notice appoint their
own Arbitrator as provided for herein and notify the other Party thereof. The
American Arbitration Association shall also proceed with the appointment of any
Arbitrator if any Party required to proceed with such an appointment shall not
have done so within the aforesaid 30 (thirty) day period. The Arbitration shall
be held in accordance with the Commercial Rules of the American Arbitration
Association and take place in New York, NY. Notwithstanding the above, without
resort to arbitration in the


                                      -20-
<PAGE>

first instance, any Party shall have the right to bring suit against the other
Party to resolve the dispute as provided in Section 6.6 below.

         6.5 AMENDMENT AND WAIVER. This S/R Agreement may be amended,
supplemented, or otherwise modified only by means of a written instrument signed
by all Parties. Any waiver of any rights or failure to act in a specific
instance shall relate only to such instance and shall not be construed as an
agreement to waive any rights or fail to act in any other instance, whether or
not similar.

         6.6 APPLICABLE LAW, JURISDICTION AND SERVICE OF PROCESS. This S/R
Agreement shall be governed by and construed in accordance with the laws of the
State of New York, without giving effect to the choice of law provisions
thereof. Any legal action or proceeding with respect to this S/R Agreement shall
be brought in the state courts of New York or in the Federal courts of the
United States of America for New York. By execution and delivery of this S/R
Agreement, each of the Parties hereto accepts for itself and in respect of its
property, generally and unconditionally, the jurisdiction of the aforesaid
courts.

         6.7 SEVERABILITY. In the event that any provision of this S/R Agreement
shall, for any reason, be held to be invalid or unenforceable in any respect,
such invalidity or unenforceability shall not affect any other provision hereof,
and the Parties shall negotiate in good faith to modify the S/R Agreement to
preserve their original intent.

         6.8 ENTIRE AGREEMENT. This S/R Agreement in conjunction with the
Worldwide License Agreement constitutes the entire agreement between the Parties
with respect to the subject matter hereof and supersedes all prior agreements or
understandings


                                      -21-
<PAGE>

between the parties relating to the subject matter hereof. This Agreement may
not be modified or amended except by written instrument, signed by all Parties.

         6.9 HEADINGS. The captions to the several Articles and Sections hereof
are not a part of this S/R Agreement, but are merely guides or labels to assist
in locating and reading the several Articles and Sections hereof.

         6.10 COUNTERPARTS. This S/R Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.

         6.11 INDEPENDENT CONTRACTORS; NEGATION OF PARTNERSHIP. The relationship
of EPIX, GH and Bracco established by this S/R Agreement is that of independent
contractors, and nothing contained in this S/R Agreement shall be construed to
give any Party the power to direct or control the day-to-day activities of any
other Party, or allow any Party to create or assume an obligation on behalf of
any other Party for any purpose whatsoever. This S/R Agreement is not intended
to create a partnership between EPIX, GH and/or Bracco for United States federal
income tax purposes for any state or local jurisdiction in the United States, of
for any country other than the United States. Therefore, there is no requirement
in the United States to file Form 1065, United States Partnership Return of
Income, or any similar state or local income tax return in any political
subdivision, of the United States, or any similar tax document in any country
other than the United States in regard to the contractual relationship described
in this S/R Agreement.

         6.12 AMBIGUITIES. The Parties acknowledge and agree that: (i) each
Party reviewed and negotiated the terms and provisions of the S/R Agreement and
have


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<PAGE>

contributed to its revision; (ii) the rule of construction to the effect that
any ambiguities are resolved against the drafting Party shall not be employed in
the interpretation of this S/R Agreement; and (iii) the terms and provisions of
this S/R Agreement shall be construed fairly as to all Parties and not in favor
of or against any Party, regardless of which Party was generally responsible for
the preparation of this S/R Agreement.


                                      -23-
<PAGE>


         IN WITNESS WHEREOF, the undersigned have duly executed and delivered
this S/R Agreement as of the date first above written.

BRACCO IMAGING S.P.A.                      EPIX MEDICAL, INC.


By: /s/ Diana Bracco                       By: /s/ Michael D. Webb
    ---------------------------                ------------------------------
Title: Chairman                            Title: CEO
      ------------------------                    ---------------------------
Date: September 25, 2001                   Date:  September 24, 2001
      ------------------------                    ---------------------------


THE GENERAL HOSPITAL CORPORATION


By: /s/ Frances Toneguzzo
    -----------------------------
Title: Director
       --------------------------
Date:  September 24, 2001
       ---------------------------


Exhibits attached:

         Exhibit 1: List of Current Bracco Affiliates
         Exhibit 2: List of Patents
         Exhibit 3: Form of Termination Of Action/Dispute Request
         Exhibit 4: List of Worldwide Actions/Disputes and Named Entities
         Exhibit 5: List of Countries having Issued Licensed Patents
         Exhibit 6: Press Release

THE FOREGOING EXHIBITS HAVE BEEN OMITTED AND WILL BE FURNISHED SUPPLEMENTALLY TO
THE COMMISSION UPON REQUEST.


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