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                                                                Exhibit 10(vv)

                        DEFERRED STOCK PURCHASE AGREEMENT

            This DEFERRED STOCK PURCHASE AGREEMENT (this "Agreement") is made as
of this 19th day of May, 2000 by and between Alliance Pharmaceutical Corp., a
New York corporation (the "Company"), and Baxter Healthcare Corporation, a
Delaware corporation (the "Buyer").

            THE PARTIES AGREE AS FOLLOWS:

            1. Authorization, Purchase and Sale of Preferred Stock.

            1.1 Authorization of Preferred Stock. The Company has authorized the
issuance and sale of (a) up to 13,637 shares of its Series G Preferred Stock,
$0.01 par value (such Series G Preferred Stock being hereinafter referred to as
the "G Stock") and (b) up to 13,636 Shares of its Series H Preferred Stock,
$0.01 par value (such Series H Preferred Stock being hereinafter referred to as
the "H Stock") both to be issued under this Agreement. The rights, privileges,
and preferences of the G Stock and the H Stock are as set forth in the Company's
Certificate of Amendment of Certificate of Incorporation (the "Certificate of
Amendment") in the form attached to the Preferred Stock Purchase Agreement of
even date herewith between the parties hereto (the "First Purchase Agreement").

            1.2 Purchase and Sale of the Preferred Stock. Subject to the terms
and conditions of this Agreement and on the basis of the representations and
warranties set forth herein, the Company agrees to sell to the Buyer, and the
Buyer agrees to purchase from the Company, (a) 13,637 shares of G Stock (the "G
Shares") at a purchase price of $1,100 per share, or an aggregate purchase price
of $15,000,700 at the First Closing (as defined below) and (b) 13,636 shares of
H Stock (the "H Shares") at a purchase price of $1,100 share, or an aggregate
purchase price of $14,999,600 at the Second Closing (as defined below).

            1.3 Definitions. Certain terms used herein have the following
meanings:

      "Current Market Price" per share of Common Stock shall mean the average of
the daily market prices for the twenty (20) consecutive Trading Days ending on
the Trading Day immediately preceding the date of the NDA Filing. The market
price for each such Trading Day shall be the last reported sales price on the
principal exchange on which the Common Stock is listed, or, if it is not so
listed, the NASDAQ National Market System or on the over-the-counter market.

      "Exchange Act" shall mean the Securities Exchange Act of 1934, as amended.

      "FDA" shall mean the United States Food and Drug Administration.

      "First Closing" shall have the meaning set forth in Section 1.4.
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      "1933 Act" shall mean the Securities Act of 1933, as amended.

      "SEC" shall mean the Securities and Exchange Commission.

      "Second Closing" shall have the meaning set forth in Section 1.4.

      "Trading Day" shall mean any day on which trading takes place (a) if the
Common Stock is then listed or admitted to trading on a national securities
exchange, on the principal national securities exchange on which the Common
Stock is then listed or admitted to trading; or (b) if not, in the
over-the-counter market and prices reflecting such trading are published by the
National Association of Securities Dealers Automated Quotation System.

      "Transaction Agreements" shall have the meaning set forth in the First
Purchase Agreement.

            1.4 The Closings. Provided that in each case the Company has
not received a notice from PFC Therapeutics, LLC ("PFC") terminating the License
Agreement (as defined in the First Purchase Agreement) pursuant to Article 10
thereof, (i) the purchase and sale of the G Shares shall occur at the offices of
Gibson, Dunn & Crutcher LLP, 4 Park Plaza, Irvine, California 92614-8557 at
10:00 a.m., local time, on March 15, 2001 provided that the Company may postpone
the First Closing for up to sixty days to comply with any condition to such
Closing or at such other time and place as the parties shall mutually agree (the
"First Closing") and (ii) the purchase and sale of the H Shares shall occur at
the offices of Gibson, Dunn & Crutcher LLP, 4 Park Plaza, Irvine, California
92614-8557 at 10:00 a.m., local time, on September 15, 2001 or at such time and
place as the parties shall mutually agree (the "Second Closing" and the First
Closing and the Second Closing each a "Closing"); provided that the Company may
postpone the First Closing for up to sixty days to comply with any condition to
such Closing and further provided that in the event a delay in either Closing is
necessary to permit compliance with any state or federal law, such Closing may
be postponed until such compliance is obtained. At each Closing, the Company
will deliver to the Buyer a certificate, registered in Buyer's name,
representing the G Shares or H Shares, as applicable, to be purchased by the
Buyer against payment of the purchase price thereof in lawful money of the
United States of America by wire transfer or check payable to the Company.

            2. Representations and Warranties of the Company. The Company hereby
represents and warrants to the Buyer that as of the date hereof:

            2.1. Organization and Corporate Power. The Company is a corporation
duly organized, validly existing and in good standing under the laws of the
State of New York and is qualified to do business as a foreign corporation in
each jurisdiction where failure to qualify would have a Material Adverse Effect
(as defined in Section 2.13) on the business or properties of the Company. The
Company has full power and authority to own its property, to carry on its
business as presently conducted and to carry out the transactions contemplated
hereby. The copies of the Certificate of Incorporation, Certificate of Amendment
and Bylaws of the

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Company, as amended to date, which have been furnished to the Buyer by the
Company, are correct and complete.

            2.2 Authorization. The Company has full power to execute, deliver
and perform this Agreement, the Transaction Agreements to which it is a party
and each other agreement entered into by the Company in connection with this
Agreement, and each such agreement has been duly executed and delivered by the
Company and is the legal, valid and, assuming due execution by the other parties
hereto and thereto, binding obligation of the Company, enforceable in accordance
with its terms, subject to applicable bankruptcy, insolvency, moratorium,
reorganization or similar laws affecting creditors' rights generally, and to
general equitable principles. The execution, delivery and performance of this
Agreement, including the sale, issuance and delivery of the G Shares, the H
Shares and the Transaction Agreements to which it is a party, and each other
agreement entered into by the Company in connection with this Agreement, has
been duly authorized by all necessary corporate action of the Company.

            2.3 Capitalization. The entire authorized capital stock of the
Company consists of 75,000,000 shares of common stock, $0.01 par value per share
(the "Common Stock"), of which 47,167,083 shares are issued and outstanding on
May 5, 2000, and 5,000,000 shares of preferred stock, $.01 par value, of which
(i) 1,500,000 have been designated Series A Preferred Stock and are not issued
or outstanding (ii) 500,000 have been designated Series F Preferred Stock and,
as of the date hereof, will be issued and outstanding (iii) 13,367 have been
designated as Series G Preferred Stock, all of which are to be issued at the
First Closing, and (iv) 13,636 have been designated as Series H Preferred Stock,
all of which are to be issued at the Second Closing. None of the remaining
2,972,727 shares of such preferred stock are issued or outstanding. The shares
of Common Stock outstanding are duly authorized, validly issued, fully paid and
nonassessable. No shares of Common Stock or preferred stock are held in the
Company's treasury. The Company has authorized and reserved 13,637 shares of G
Stock and 13,636 shares of H Stock for issuance hereunder. When issued in
accordance with the terms of this Agreement, each of the G Shares and the H
Shares will be duly authorized, validly issued and outstanding, fully paid and
nonassessable, and the certificates representing the same will be duly and
validly authorized, executed and delivered by the Company. The Company has
authorized and reserved for issuance (a) upon conversion of the G Shares
1,363,700 shares of its Common Stock or such other number as may be necessary to
be issued upon such conversion (such shares, until sold to the public generally
pursuant to a registration statement or Rule 144(k) promulgated under the
Securities Act of 1933, as amended (the "1933 Act"), are referred to herein as
"G Conversion Shares") and (b) upon conversion of the H Shares 1,363,600 shares
of its Common Stock or such other number as may be necessary to be issued upon
such conversion (such shares, until sold to the public generally pursuant to a
registration statement or Rule 144(K) promulgated under the 1933 Act are
referred to herein as "H Conversion Shares"). Each of the G Conversion Shares
and H Conversion Shares will, upon such issuance in accordance with the terms of
the Company's Certificate of Incorporation, as amended, be duly authorized,
validly issued and outstanding, fully paid and nonassessable, and the
certificates representing the same will be duly and validly authorized, executed
and delivered by the Company. There are no outstanding warrants, rights of first
refusal, options or other rights to purchase or acquire, or exchangeable for or
convertible into, any shares of Common Stock or preferred stock, except as

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disclosed on Schedule 2.3 or as otherwise disclosed in writing. The Company has
reserved Common Stock for issuance upon exercise of outstanding options and
warrants as set forth in Section 2.3 of the disclosure schedule to this
Agreement. Except as provided herein, there are no preemptive rights with
respect to the issuance or sale by the Company of any of its securities. Except
as provided in this Agreement or as imposed by applicable securities laws, there
are no restrictions on the transfer or voting of any shares of the Common Stock,
G Stock or H Stock. There are no existing rights with respect to registration
under the 1933 Act of any of the Company's securities except as set forth herein
or as disclosed on Schedule 2.3. Upon consummation of the transactions
contemplated hereby, good and valid title to each of the G Shares and the H
Shares will pass to Buyer, free and clear of any encumbrances, liens, claims,
charges or assessments of any nature whatsoever. Upon their issuance in
accordance with the Company's Certificate of Incorporation, as amended, good and
valid title to each of the G Conversion Shares and the H Conversion Shares and
such shares will pass to the Buyer, free and clear of any encumbrances, liens,
claims, charges or assessments of any nature whatsoever.

            2.4 Financial Statements. The Company has delivered to Buyer a copy
of the Company's Annual Report on Form 10-K for the fiscal year ended June 30,
1999 (the "1999 10-K"), containing audited consolidated balance sheets and
statements of operations and cash flow for the fiscal years ended June 30, 1997,
June 30, 1998 and June 30, 1999 and a copy of the Company's Quarterly Report on
Form 10-Q for the quarters ended September 30, 1999 and December 31, 1999 and
the Company's draft 10-Q for the quarter ended March 31, 2000 (the Form 10-Qs,
the draft 10-Q and the financial statements therein, the 1999 10-K and all
future Form 10-Ks and Form 10-Qs filed by the Company are collectively referred
to as the "Financial Statements," provided that, at any given date, such term
shall refer only to the Financial Statements existing as of that date). The
Financial Statements are in accordance with the books and records of the
Company, have been prepared in accordance with generally accepted accounting
principles, consistently applied, and fairly present, in all material respects,
the financial position, results of operations and cash flows of the Company as
of each such date and for each of the periods covered thereby, except that such
interim statements are subject to normal year-end adjustments.

            2.5 Absence of Undisclosed Liabilities. Except as and to the extent
reflected or stated in the Financial Statements, neither the Company nor its
subsidiaries has any debts, liabilities or obligations of any nature, whether
accrued, absolute, assigned or otherwise, whether due or to become due, other
than those incurred in the ordinary course of business.

            2.6 Absence of Certain Developments. Since June 30, 1999, except as
disclosed in the Financial Statements or the disclosure schedules to this
Agreement or as otherwise expressly contemplated therein or by this Agreement or
the Transaction Agreements to which it is a party, and except for continuing
operating losses, the Company has not:

            (a) changed or amended its Articles of Incorporation or By-Laws (or
similar governing documents);

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            (b) incurred any obligation or liability (fixed or contingent),
except normal trade or business obligations incurred in the ordinary course of
business and consistent with past practice, none of which individually or in the
aggregate would cause a Materially Adverse Effect;

            (c) discharged or satisfied any material lien, security interest,
charge or other encumbrance or paid any material obligation or liability (fixed
or contingent), other than in the ordinary course of business and consistent
with past practice;

            (d) mortgaged, pledged or subjected to any lien, security interest,
charge or other encumbrance any of its material assets or properties (other than
liens permitted pursuant to Section 2.7 below);

            (e) transferred, leased or otherwise disposed of any of its material
assets or properties, except for fair consideration in the ordinary course of
business and consistent with past practice, or acquired any material assets or
properties, except in the ordinary course of business and consistent with past
practice;

            (f) declared, set aside or paid any distribution (whether in cash,
stock or property or any combination thereof) in respect of its capital stock or
redeemed or otherwise acquired any of its capital stock or split, combined or
otherwise similarly changed its capital stock or authorized the creation or
issuance of or issued or sold any capital stock or any securities or obligations
convertible into or exchangeable therefor, or gave any person any right to
acquire any capital stock from the Company, or agreed to take any such action
(other than upon the exercise of outstanding warrants or stock options, and the
issuance and exercise of stock options issued under the Company's existing stock
option plans);

            (g) made any investment of a capital nature, whether by purchase of
stock or securities, contributions to capital, property transfers or otherwise,
in any other partnership, corporation or any other entity, or purchase any
material property or assets;

            (h) canceled or compromised any debt or claim other than in the
ordinary course of business;

            (i) waived or released any rights of material value, including,
without limitation, any material patents, trademarks and trade names, trademark
and trade name registrations, logos, servicemark registrations, copyright
registrations, applications pending the date hereof for patent or for trademark,
trade name, servicemark or copyright registrations, and other material
proprietary intellectual property rights (including, but not limited to,
know-how, information, proprietary rights and information) ("Intangible
Rights");

            (j) transferred or granted any material rights under or with respect
to any Intangible Rights other than on reasonable business terms, or permitted
any license, permit or other form of authorization relating to a material
Intangible Right to lapse;

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            (k) suffered any casualty loss or damage (whether or not such loss
or damage shall have been covered by insurance) which affects in any material
respect its ability to conduct business;

            (l) made or granted any wage or salary increase applicable to any
group or classification of employees generally, entered into any employment
contract with or made any loan to, or entered into any material transaction of
any other nature with, any officer, or employee of the Company, except in the
ordinary course of business; or

            (m) suffered a Material Adverse Effect.

            2.7 Title to Properties. Except as stated in the Financial
Statements as of the date of their representation, each of the Company and its
subsidiaries has good and marketable title to all material properties and assets
(excluding intellectual property which is covered by Section 2.10 hereof)
necessary to its business as presently conducted and as proposed to be
conducted, and to all of its properties and assets, free and clear of all
mortgages, security interests, liens, restrictions or encumbrances other than
(a) those disclosed on Schedule 2.7, (b) the lien of current taxes not yet due
and payable and (c) possible minor liens and encumbrances which do not in any
case, individually or in the aggregate, materially detract from the value of the
property subject thereto or materially impair the operations of the Company or
its subsidiaries, and would not result in the occurrence of a Material Adverse
Effect, and which have not arisen otherwise than in the ordinary course of
business.

            2.8 Tax Matters. All taxes, including, without limitation, income,
excise, property, sales, transfer, use, franchise, payroll, employees' income
withholding and social security taxes imposed or assessed by the United States
or by any foreign country or by any state, municipality, subdivision or
instrumentality of the United States or of any foreign country, or by any other
taxing authority, which are due or payable by the Company, and all interest,
penalties and additions thereon, whether disputed or not, have been paid in
full, and all tax returns or other documents required to be filed in connection
therewith have been accurately prepared and duly and timely filed. The Company
has not been delinquent in the payment of any foreign or domestic tax,
assessment or governmental charge or deposit and has no tax deficiency or claim
outstanding, assessed or, to the best of its knowledge, proposed against it. The
provisions for taxes in the Financial Statements are sufficient for the payment
of all accrued and unpaid federal, state, county and local taxes of the Company.

            2.9 No Defaults. The Company is not in violation, nor will the
execution of this Agreement or any of the Transaction Agreements to which it is
a party cause a violation, of any term or provision of (a) its Certificate of
Incorporation or Bylaws or any material note, indenture, mortgage, lease,
agreement, contract, purchase order or other material instrument, document or
agreement to which the Company is a party or by which it or any of its
properties or assets is bound or affected or (b) any order, writ, injunction or
decree of any court or any federal, state, municipal or other governmental
department, commission, board, bureau, agency or instrumentality, domestic or
foreign.

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            2.10 Intellectual Property. To the best of the Company's knowledge;

            (a) The Company has good title to and ownership of or licensed
rights to, free and clear of all liens, claims and encumbrances of any nature,
Intangible Rights licensed by the Company to PFC under the Transaction
Agreements, and the conduct by the Company of its business in connection with
the Intangible Rights neither conflicts with or constitutes, or is expected to
conflict with or constitute, an infringement of the rights of others.

            (b) The Company has sufficient title to and ownership of, or license
rights to, or has applied for, all Intangible Rights necessary to the proper
conduct of its business as described in the Financial Statements. The
consummation of the transactions contemplated hereby will not alter or impair
any such Intangible Rights.

            (c) The Company has not received any communications alleging that,
and has no knowledge that the Company has violated or, by conducting its
business, would violate any of the Intangible Rights of any other person or
entity.

            2.11 Effect of Transactions. The execution, delivery and performance
of this Agreement and the transactions contemplated hereby, and compliance with
the provisions hereof by the Company, do not and will not, with or without the
passage of time or the giving of notice or both, (i) violate any current law,
statute, rule, regulation, ruling, writ, injunction, order, judgment or decree
of any court, administrative agency or other governmental body or (ii) conflict
with or result in any breach of any of the terms, conditions or provisions of,
or constitute a default (or give rise to any right of termination, cancellation
or acceleration) under, or result in the creation of any lien, security
interest, charge or encumbrance upon any of the properties or assets of the
Company under the Certificate of Incorporation or Bylaws of the Company or any
material note, indenture, mortgage, lease, agreement, contract, purchase order
or other instrument, document or agreement to which the Company is a party or by
which it or any of its properties or assets is bound or affected.

            2.12 No Governmental Consent or Approval Required. Based in part on
the representations made by the Buyer in Section 3 of this Agreement, and except
as contemplated herein, no authorization, consent, approval or other order of,
declaration to, or registration, qualification, designation or (other than the
Certificate of Amendment) filing with any federal, state or local governmental
agency or body is required for or in connection with the valid and lawful
authorization, execution and delivery by the Company of this Agreement or any
Transaction Agreement to which it is a party, and consummation of the
transactions contemplated hereby or thereby, or for or in connection with the
valid and lawful authorization, issuance and delivery of the G Shares or the H
Shares or for or in connection with the valid and lawful authorization,
reservation, issuance and delivery of the G Conversion Shares or the H
Conversion Shares other than (a) the qualification (or taking of such action as
may be necessary to secure an exemption from

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qualification if available) of the offer and sale of the G Shares and the H
Shares under the California Corporate Securities Law of 1968, as amended, and
other applicable state securities laws, which filings and qualifications, if
required, will be accomplished in a timely manner so as to comply with such
qualification or exemption from qualification requirements or (b) compliance
with the applicable requirements of the Hart-Scott-Rodino Antitrust Improvement
Act of 1976 and shareholder approval pursuant to Nasdaq requirements, in each
case if required in connection with the issuance of the G Conversion Shares or
the H Conversion Shares.

            2.13 Litigation. Except as disclosed in the Financial Statements and
ongoing intellectual property administrative proceedings of which the Buyer has
been informed, there is no claim, arbitration, action, suit, proceeding or
investigation pending, or to the best knowledge of the Company, threatened
against the Company or any of its subsidiaries, which questions the validity of
this Agreement or any Transaction Agreement to which it is a party or the right
of the Company or any of its subsidiaries to enter into any such agreements or
to consummate the transactions contemplated hereby or thereby, or which might
result, either individually or in the aggregate, in any material adverse effect
on the condition of the Company or its assets, liabilities, properties,
business, operations or insofar as they may be reasonably foreseen, prospects
generally (a "Material Adverse Effect"), or any change in the current equity
ownership of the Company. Neither the Company nor any of its subsidiaries is a
party to, or subject to the provisions of, any order, writ, injunction, judgment
or decree of any court or governmental agency or instrumentality which would
have a Material Adverse Effect.

            2.14 Securities Laws. Assuming that the Buyer's representations and
warranties contained in Section 3 of this Agreement are and continue to be true
and correct, the offer, issuance and sale to Buyer of the G Shares, the G
Conversion Shares, the H Shares and the H Conversion Shares are and will be
exempt from the registration and prospectus delivery requirements of the 1933
Act, and have been registered or qualified (or are exempt from registration and
qualification) under the registration, permit or qualification requirements of
all applicable state securities laws. No person authorized by the Company as
agent, broker, dealer or otherwise in connection with the offering or sale of
the G Shares, the G Conversion Shares, the H Shares, the H Conversion Shares or
any similar securities, has taken or will take any action (including, without
limitation, any offer or sale of any securities under circumstances which would
require the integration of such securities with the G Shares or the H Shares
being sold hereunder under the 1933 Act or the rules and regulations of the
Securities and Exchange Commission which would subject such offer and sale to
the registration provisions of the 1933 Act.

            2.15 Brokerage. There are no claims for brokerage commissions or
finder's fees or similar compensation in connection with the transactions
contemplated by this Agreement based on any arrangement made by or on behalf of
the Company other than the fee being paid by the Company to Burrill & Company.
The Company agrees to indemnify and hold the Buyer harmless against any damages
incurred as a result of any such claim.

            2.16 Insurance. The Company maintains in full force such types and
amounts of insurance issued by issuers of recognized responsibility insuring the
Company, with respect to its liability, workers' compensation, business and
properties, in such amounts and against such losses and risks as are sufficient
for compliance with all requirements of law and are deemed appropriate by the
Company under its present circumstances.

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            2.17 Compliance With Laws. Each of the Company and its subsidiaries
is in compliance in all material respects with every statute, law or regulation
applicable to the Company's business or operations, including (without
limitation) statutes, laws and regulations relating to the environment or
occupational health and safety, laboratory and manufacturing practices
(including current Good Manufacturing Practices prescribed by the U.S. Food and
Drug Administration), the experimental use of animals and the use and disposal
of hazardous or potentially hazardous substances (including, with limitation,
radioactive compounds and solvents), and, to the best of the Company's knowledge
and its subsidiaries' knowledge, no material expenditures are required or
currently anticipated in order to comply with any such existing statute, law or
regulation. Neither the Company nor its subsidiaries has received any notice
from any third party of any alleged material violation of any of the foregoing.

            2.18 Retirement Obligations, etc. The Company does not have any
Employee Benefit Plan as defined in the Employee Retirement Income Security Act
of 1974, other than as disclosed in the Financial Statements. The Company does
not have any employees that are represented by a union. The Company is not a
party to any collective bargaining agreement and, to the best of the Company's
knowledge, no organizational efforts are presently being made with respect to
any of its employees. The Buyer will not incur through consummation of any of
the transactions contemplated by this Agreement any liability in respect of
employees of the Company or any of its employee benefit plans.

            2.19 Investment Company. The Company is not an "investment company"
within the meaning of the Investment Company Act of 1940, as amended, and will
not, as a result of the transactions contemplated hereby, become an "investment
company."

            2.20 Disclosure. The Company has fully provided the Buyer with all
the information that the Buyer has requested for deciding whether to purchase
the G Shares and the H Shares. The Financial Statements, this Agreement, and the
other exhibits or schedules delivered in connection herewith or therewith, taken
together, do not contain any untrue statement of a material fact or omit to
state a material fact necessary to make the statements herein or therein in
light of the circumstances under which they were made not misleading.

            3. Representations and Warranties and other Agreements of the Buyer.

            3.1 Representations and Warranties. The Buyer hereby represents and
warrants that:

            (a) Authorization. The Buyer has full power and authority to
execute, deliver and perform its obligations under this Agreement and each
Transaction Agreement to which it is a party and to purchase the G Shares and
the H Shares. Assuming due execution by the Company hereof and thereof, this
Agreement and each Transaction Agreement to which the Buyer is a party
constitute the valid and legally binding obligation of the Buyer, enforceable
against the Buyer in accordance with their respective terms, subject to
applicable bankruptcy,

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insolvency, moratorium, reorganization or similar laws affecting creditors'
rights generally, and to general equitable principles.

            (b) Purchase Entirely for Own Account. It is the Buyer's intention
to acquire the G Shares, the G Conversion Shares, the H Shares and the H
Conversion Shares (collectively, the "Securities") for investment for the
Buyer's own account, not as a nominee or agent and not with a view to the sale
or other disposition of any part thereof in violation of the 1933 Act. The Buyer
has no present intention of selling, granting any participation in, or otherwise
disposing of the same in violation of the 1933 Act. The Buyer does not have any
contract, undertaking, agreement or arrangement with any person to sell,
transfer, or grant participation to such person or to any third person, with
respect to any of the Securities.

            (c) Restrictions on Disposition. The Buyer covenants that in no
event will it dispose of any of the Securities (other than pursuant to Rule 144
promulgated under the 1933 Act ("Rule 144") or pursuant to a registration
statement filed with the Securities and Exchange Commission (the "SEC") pursuant
to the 1933 Act) unless and until (i) the Buyer shall have notified the Company
of the proposed disposition and shall have furnished the Company with a
statement of the circumstances setting forth the number of shares and price it
proposes to sell at, excluding the name of the transferee and other information
unless otherwise required in the written opinion of Company counsel to comply
with the 1933 Act; and (ii) the Buyer shall have furnished the Company with an
opinion of the Buyer's counsel reasonably satisfactory in form and substance to
the Company and the Company's counsel to the effect that (A) such disposition
will not require registration under the 1933 Act or compliance with any
applicable state, local or foreign law, or (B) appropriate action necessary for
compliance with the 1933 Act and any applicable state, local or foreign law has
been taken. The restrictions on transfer imposed by this Section 3.1(c) shall
cease and terminate as to the Securities when: (i) such securities shall have
been effectively registered under the 1933 Act and sold by the owner thereof in
accordance with such registration; or (ii) an opinion of the kind described in
the preceding sentence states that all future transfers of such securities by
the holder thereof would be exempt from registration under the 1933 Act and
compliance with any applicable state, local or foreign law. Each certificate
evidencing the Securities shall bear an appropriate restrictive legend as set
forth in Section 3.3 below, except that such certificate shall not be required
to bear such legend after a transfer thereof if the transfer was made in
compliance with Rule 144 or pursuant to a registration statement or if the
opinion of counsel referred to above is issued and provides that such legend is
not required in order to establish compliance with any provisions of the 1933
Act.

            (d) Receipt of Information. The Buyer has been furnished access to
such information and documents as the Buyer has requested and has been afforded
an opportunity to ask questions of and receive answers from representatives of
the Company concerning the terms and conditions of this Agreement, the other
Transaction Agreements and the purchase of the G Shares and the H Shares.

            (e) Brokerage. There are no claims for brokerage commissions or
finder's fees or similar compensation in connection with the transactions
contemplated by this Agreement based on any arrangement or agreement made by or
on behalf of the Buyer, and the Buyer agrees

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to indemnify and hold the Company harmless against any damages incurred as a
result of any such claims.

            3.2 Further Provisions Regarding Disposition.

            (a) Transfer to Affiliates. Notwithstanding the provisions of
Section 3.1(c) above, no registration statement or opinion of counsel shall be
necessary for a transfer of the Securities by the Buyer to a subsidiary or
affiliate (as defined pursuant to the 1933 Act) of the Buyer which is an
accredited investor, if the transferee makes the representations and warranties
set forth in Sections 3.1(b) and (c) and agrees in writing to be subject to the
terms hereof, to the same extent as if such transferee were the Buyer hereunder.

            (b) New Certificates. Whenever the restrictions imposed by Section
3.1(c) above shall terminate as herein provided, the holder of the securities as
to which such restrictions have terminated shall be entitled to receive from the
Company, without expense, one or more new certificates not bearing restrictive
legends and not containing any reference to the restrictions imposed by this
Agreement.

            3.3 Legends. It is understood that, subject to Sections 3.1(c) and
3.2(b), the certificates evidencing the G Shares and the H Shares may bear
substantially the following legends:

            (a) THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES
ACT OF 1933. THEY MAY NOT BE SOLD, OFFERED FOR SALE, PLEDGED OR HYPOTHECATED IN
THE ABSENCE OF A REGISTRATION STATEMENT IN EFFECT WITH RESPECT TO THE SECURITIES
UNDER SUCH ACT OR AN OPINION OF COUNSEL SATISFACTORY TO THE COMPANY THAT SUCH
REGISTRATION IS NOT REQUIRED OR UNLESS SOLD PURSUANT TO RULE 144 OF SUCH ACT.

            (b) Any legend required by the laws of any other applicable
jurisdiction.

            3.4 Notice of Certain Events. The Buyer hereby covenants and agrees
that during the term of the Transaction Agreements (including any extension
thereof), unless notice has been provided in accordance with Section 3.1 (c), it
will provide written notice to the Company of any sale or disposition, on the
open market or in private transactions, by the Buyer or any of its affiliates
(including subsidiaries or other entities controlled by the Buyer) of any shares
of the Common Stock or other equity securities of the Company (or if the Buyer
or such affiliates shall direct any third party to take any such actions on
behalf of the Buyer or such affiliates), provided that no such notice need be
given if the relevant transaction related to 1% or less of the outstanding
common stock (on an as converted basis) of the Company. Such notice shall be
transmitted to the Company by facsimile (with telephonic notice) within ten (10)
days after any such transaction, and shall specify the person or entity
effecting the transaction, the date of such transaction, and the number of
securities with respect to such transaction.

                                       11
<PAGE>

            3.5 Limitation on Notice of Certain Events. The Buyer shall not be
required to comply with the provisions of Section 3.4 if, in connection with any
transaction referred to in Section 3.4, the Buyer or its affiliate files with
the SEC and sends to the Company a statement on Schedule 13D or Schedule 13G in
connection with such transaction and in compliance with Rule 13d-1 under the
Securities Exchange Act of 1934, as amended (the "Exchange Act").

            4. Conditions to the Buyer's Obligations at each Closing. The
obligations of the Buyer under Section 1.2 of this Agreement are subject to the
fulfillment on or before each of the First Closing and the Second Closing of
each of the following conditions:

            4.1 Performance. The Company shall have performed and complied, in
all material respects, with all agreements, obligations, and conditions
contained in this Agreement and each other Transaction Agreement to which it is
a party that are required to be performed or complied with by it on or before
such Closing.

            4.2 License Agreement. PFC shall not have given written notice to
the Company terminating the License Agreement.

            4.3 Qualifications. All authorizations, approvals, or permits, if
any, of any governmental authority or regulatory body of the United States or of
any state or of any other country that are required in connection with the
lawful issuance and sale of the G Shares or the H Shares, as applicable to the
Buyer pursuant to this Agreement shall have been duly obtained and shall be
effective on and as of the such Closing.

            5. Conditions of the Company's Obligations at each Closing. The
obligations of the Company under Section 1.2 of this Agreement are subject to
the fulfillment on or before each of the First Closing and the Second Closing of
each of the following conditions:

            5.1 Performance. The Buyer shall have performed and complied, in all
material respects, with all agreements, obligations and conditions contained in
this Agreement and each other Transaction Agreement to which it is a party that
are required to be performed or complied with by it on or before such Closing.

            5.2 License Agreement. The Company shall not have received written
notice from PFC terminating the License Agreement.

            5.3 Qualifications. All authorizations, approvals, or permits, if
any, of any governmental authority or regulatory body of the United States or of
any state or of any other country that are required in connection with the
lawful issuance and sale of the G Shares or the H Shares, as applicable, to the
Buyer pursuant to this Agreement shall have been duly obtained and shall be
effective on and as of such Closing.

            6. Affirmative Covenants of the Company.

                                       12
<PAGE>

            6.1 Reports under the Exchange Act. With a view to making available
to the Buyer the benefits of Rule 144 promulgated under the 1933 Act and any
other rule or regulation of the SEC that may at any time permit a permitted
holder of Securities to sell securities of the Company to the public without
registration, and with a view to making it possible for any such holder to sell
the Securities registered on Form S-3, the Company agrees to (subject to Section
7 in the case of Section 6.1(b)):

            (a) make available adequate current public information as
contemplated by Rule 144 (c)(1) or (2);

            (b) take such action as is necessary to enable a holder to utilize
Form S-3 for the sale of Securities;

            (c) file with the SEC in a timely manner all reports and other
documents required of the Company under the 1933 Act and the Exchange Act; and

            (d) furnish to a holder owning any Securities upon request (i) a
written statement by the Company that it has complied with the reporting
requirements of Rule 144, the 1933 Act and the Exchange Act, or that it
qualifies as a registrant whose Securities may be resold pursuant to Form S-3
(at any time after it so qualifies), (ii) a copy of the most recent annual or
quarterly report of the Company and such other reports and documents so filed by
the Company, and (iii) such other information as may be reasonably required to
permit any holder of Securities to avail itself of any rule or regulation of the
SEC which permits the selling of any such Securities without registration or
pursuant to such form.

            6.2 Material Change Notice. Within seven days before each of the
First Closing and the Second Closing, if the information provided in Article 2
hereof is not true and correct in all material respects, the Company will
provide a written notice of such changes to the Buyer or a statement to the
effect that no such changes have occurred.

            6.3 Senior Ranked Preferred Stock. As long as any G Shares or H
Shares are issued and outstanding, the Company shall not issue any shares of the
Series A Preferred Stock and shall not designate and issue any preferred stock
which is ranked senior to the Series G Preferred Stock or the Series H Preferred
Stock.

            7. Registration of Common Stock.

            7.1 Registration.

            Provided that the G Conversion Shares or the H Conversion Shares, as
applicable may not be sold pursuant to Rule 144(K) of the 1933 Securities Act,
or any successor thereto, the Company will use its best efforts to cause to
become effective, within 90 days after conversion of the G Shares or the H
Shares, as applicable, a registration statement under the 1933 Act on Form S-3
or such other registration form as counsel to the Company deems appropriate,
covering the G Conversion Shares or the H Conversion Shares, as applicable (in
each case, "Registrable Stock").

                                       13
<PAGE>

For purposes of this Agreement, a "Holder" of any security means the record or
beneficial owner of such security or any permitted successor or assignee
thereof.

            7.2 Registration Expenses. The Company shall pay all expenses
incurred in effecting the registration of Registrable Stock pursuant to Section
7.1 including, without limitation, all federal and state registration,
qualification and filing fees, printing expenses, fees and disbursements of
counsel for the Company, blue sky fees and expenses, and the expense of any
special audits incident to or required by any such registration, but not
including underwriting discounts, commissions and expenses and fees of counsel
to the participating Holders.

            7.3 Registration Procedures. If and whenever the Company is required
by the provisions of Section 7.1 to effect the registration of the Registrable
Stock under the 1933 Act, the Company will, as expeditiously as possible:

            (a) prepare and file with the SEC a registration statement which
includes the Registrable Stock and use its best efforts to cause such
registration statement to become and remain effective until the distribution
described in the registration statement has been completed or until the
participating Holders can sell all such Registrable Stock pursuant to Rule 144;

            (b) prepare and file with the SEC such amendments and supplements to
such registration statement and the prospectus used in connection therewith as
may be necessary to keep such registration statement effective and to comply
with the provisions of the 1933 Act with respect to the sale or other
disposition of Registrable Stock covered by such registration statement whenever
a Holder shall desire to sell or otherwise dispose of the same, but only to the
extent provided in this Section 7;

            (c) furnish to each participating Holder (and to each underwriter,
if any, of Registrable Stock) such number of copies of a prospectus, including a
preliminary prospectus, in conformity with the requirements of the 1933 Act, and
such other documents, as such Holder may reasonably request in order to
facilitate the public sale or other disposition of the Registrable Stock;

            (d) use its best efforts to register or qualify the Registrable
Stock covered by such registration statement under such state securities or blue
sky laws of such jurisdiction as each participating Holder shall reasonably
request and do any and all other acts and things which may be necessary under
such securities or blue sky laws to enable such Holder to consummate the public
sale or other disposition in such jurisdictions of the Registrable Stock, except
that the Company shall not for any purpose be required to consent generally to
service of process or qualify to do business as a foreign corporation in any
jurisdiction wherein it is not so qualified;

            (e) before filing the registration statement prospectus or
amendments or supplements thereto, furnish to counsel selected by the
participating Holders copies of such documents proposed to be filed which shall
be subject to the reasonable approval of such counsel;

                                       14
<PAGE>

            (f) enter into and perform its obligations under an underwriting
agreement, in usual and customary form, with the managing underwriter of such
offer;

            (g) notify the participating Holders at any time when a prospectus
relating to any Registrable Stock covered by such registration statement is
required to be delivered under the 1933 Act, of the happening of any event as a
result of which the prospectus included in such registration statement, as then
in effect, includes an untrue statement of a material fact or omits to state a
material fact required to be stated therein or necessary to make the statements
therein not misleading in light of the circumstances then existing and promptly
file such amendments and supplements as may be necessary so that, as thereafter
delivered to such Holders, such prospectus shall not include an untrue statement
of a material fact or omit to state a material fact required to be stated
therein or necessary to make the statements therein not misleading in light of
the circumstances then existing and use its best efforts to cause each such
amendment and supplement to become effective;

            (h) furnish at the request of the participating Holders on the date
that such Registrable Stock is delivered to the underwriters for sale in
connection with a registration pursuant to this Section 7 (i) an opinion, dated
such date, of the counsel representing the Company, for purposes of such
registration, in form and substance as is customarily given by company counsel
to the underwriters in an underwritten public offer addressed to the
underwriters, if any, and to such Holders, and (ii) a letter dated such date,
from the independent certified public accountants of the Company, in form and
substance as is customarily given by independent certified public accountants to
underwriters in an underwritten public offer, addressed to the underwriters and
to such Holders;

            (i) notify the Holders of the issuance by the SEC of any stop order
suspending the effectiveness of the registration statement of the initiation of
any proceedings for that purpose. The Company will make every reasonable effort
to prevent the issuance of any stop order and, if any stop order is issued, to
obtain the lifting thereof at the earliest time; and

            (j) use its best efforts to cause all such Registrable Stock to be
listed on the securities exchange or the Nasdaq National Market, if any, on
which the Company's Common Stock is then listed.

            Upon receipt of any notice from the Company of the happening of any
event of the kind described in paragraph (g), the Holder will forthwith
discontinue disposition of such Registrable Stock covered by such registration
statement or prospectus until receipt of the copies of the supplemented or
amended prospectus, or until it is advised in writing by the Company that the
use of the applicable prospectus may be resumed, and has received copies of an
additional or supplemental filings which are incorporated by reference in such
prospectus, and, if so directed by the Company, the Holder will deliver to the
Company (at the Company's expense) all copies, other than permanent file copies
then in the Holder's possession, of the prospectus covering such Registrable
Stock current at the time of receipt of such notice.

                                       15
<PAGE>

            7.4 Indemnification. In the event Registrable Stock is registered
pursuant to this Section 7:

            (a) To the extent permitted by law, the Company will indemnify and
hold harmless each Holder of Registrable Stock which is included in a
registration statement filed pursuant to the provisions of this Agreement and
any underwriter (within the meaning of the 1933 Act) with respect to the
Registrable Stock, and each officer, director, employee and agent thereof and
each person, if any, who otherwise controls such Holder or underwriter (within
the meaning of the 1933 Act), against any losses or claims, damages, expenses or
liabilities, joint or several, to which they may become subject under the 1933
Act, the Exchange Act or other federal or state law, or otherwise, insofar as
such losses, claims, damages, expenses or liabilities (or actions in respect
thereof) arise out of or are based upon any untrue or allegedly untrue statement
of any material fact contained in the registration statement for the Registrable
Stock, including any preliminary prospectus or final prospectus contained
therein or any amendments or supplements thereto, or any document incident to
the registration or qualification of any Registrable Stock, or arise out of or
are based upon the omission or alleged omission to state therein a material fact
required to be stated therein or allegedly necessary to make the statements
therein not misleading or arise out of any violation or alleged violation by the
Company of the 1933 Act, the Exchange Act, any state securities law or any rule
or regulation promulgated under the 1933 Act, the Exchange Act or any state
securities law; and will reimburse such Holder, any underwriter, officer,
director, employee, agent or controlling person for any legal or other expenses
reasonably incurred by them in connection with investigating or defending any
such loss, claim, damage, liability or action; provided, however, that the
indemnity agreement contained in this Section 7.4(a) shall not apply to amounts
paid in settlement of any such loss, claim, damage, expense, liability or action
if such settlement is effected without the written consent of the Company, which
shall not be unreasonably withheld, nor shall the Company be liable under this
Section 7.4(a) to such Holder, such underwriter, officer, director, employee,
agent or controlling person for any such loss, claim, damage, expense, liability
or action to the extent that it arises out of, or is based upon, an untrue
statement or allegedly untrue statement or omission or alleged omission made in
connection with such registration statement, preliminary prospectus, final
prospectus, or amendments or supplements thereto, in reliance upon and in
conformity with information furnished in writing expressly for use in connection
with such registration by such Holder, such underwriter, officer, director,
employee, agent or such controlling person.

            (b) To the extent permitted by law, each Holder of Registrable Stock
which is included in a registration statement filed pursuant to the provisions
of this Agreement will indemnify and hold harmless the Company, each of its
employees, agents, directors and officers, each person, if any, who controls the
Company within the meaning of the 1933 Act, and any underwriter (within the
meaning of the 1933 Act) against any losses, claims, damages, expenses or
liabilities to which the Company or any such person or underwriter may become
subject, under the 1933 Act, the Exchange Act or other federal or state law or
otherwise, insofar as such losses, claims, damages, expenses or liabilities (or
actions in respect thereof) arise out of, or are based upon any untrue or
allegedly untrue statement of any material fact contained in a registration
statement for the Registrable Stock, including any preliminary prospectus or
final prospectus

                                       16
<PAGE>

contained therein or any amendments or supplements thereto, or any document
incident to the registration or qualification of any Registrable Stock, or arise
out of or are based upon the omission or alleged omission to state therein a
material fact required to be stated therein or allegedly necessary to make the
statements therein not misleading; in each case to the extent that such untrue
statement or allegedly untrue statement or omission or alleged omission was made
in such registration statement, preliminary prospectus, or amendments or
supplements thereto, in reliance upon and in conformity with information
furnished in writing by such Holder expressly for use in connection with such
registration; provided, however, that the indemnity agreement contained in this
Section 7.4(b) shall not apply to amounts paid in settlement of any such loss,
claim, damage, expense, liability or action if such settlement is effected
without the written consent of such Holder, which shall not be unreasonably
withheld; and such Holder will reimburse the Company or any such person or
underwriter for any legal or other expenses reasonably incurred by the Company
or any such person or underwriter in connection with investigating or defending
such loss, claim, damage, liability, expense or action.

            (c) Promptly after receipt by an indemnified party under this
Section 7.4 of notice of the commencement of any action, such indemnified party
will, if a claim in respect thereof is to be made against any indemnifying party
under this Section 7.4, notify the indemnifying party in writing of the
commencement thereof and generally summarize such action. The indemnifying party
shall have the right to participate in and to assume the defense thereof with
counsel mutually satisfactory to the parties. An indemnifying party shall not
have the right to direct the defense of such an action on behalf of an
indemnified party if such indemnified party has reasonably concluded that there
may be defenses available to it that are different from or additional to those
available to the indemnifying party; provided, however, that in such event, the
indemnifying party shall bear the fees and expenses of only one (1) separate
counsel for all indemnified parties, such separate counsel to be reasonably
satisfactory to the indemnifying party. The failure to notify an indemnifying
party promptly of the commencement of any such action if prejudicial to the
ability to defend such action, shall relieve such indemnifying party of any
liability to the indemnified party under this Section 7.4, but the omission so
to notify the indemnifying party will not relieve such party of any liability
that such party may have to any indemnified party otherwise than under this
Section.

            (d) To the extent permitted by law, the indemnification provided for
under this Section 7.4 will remain in full force and effect regardless of any
investigation made by or on behalf of the indemnified party or any officer,
director or controlling person (within the meaning of the 1933 Act) of such
indemnified party and will survive the transfer of securities.

            (e) If for any reason the foregoing indemnity is unavailable to, or
is insufficient to hold harmless an indemnified party, then the indemnifying
party shall contribute to the amount paid or payable by the indemnified party as
a result of such losses, claims, damages, liabilities or expenses (i) in such
proportion as is appropriate to reflect the relative benefits received by the
indemnifying party on the

                                       17
<PAGE>

one hand and the indemnified party on the other or (ii) if the allocation
provided by clause (i) above is not permitted by applicable law, or provides a
lesser sum to the indemnified party than the amount hereinafter calculated, in
such proportion as is appropriate to reflect not only the relative benefits
received by the indemnifying party on the one hand and the indemnified party on
the other but also the relative fault of the indemnifying party and the
indemnified party as well as any other relevant equitable considerations.
Notwithstanding the foregoing, no underwriter, if any, shall be required to
contribute any amount in excess of the amount by which the total price at which
the securities underwritten by it and distributed to the public were offered to
the public exceeds the amount of any damages which underwriter has otherwise
been required to pay by reason of such untrue or alleged untrue statement or
omission or alleged omission. No person guilty of fraudulent misrepresentation
(within the meaning of Section 11(f) of the 1933 Act) shall be entitled to
contribution from any person who was not guilty of such fraudulent
misrepresentation. The obligation of any underwriters to contribute pursuant to
this Section 7.4(e) shall be several in proportion to their respective
underwriting commitments and not joint.

            7.5 Information from the Buyer. The Buyer shall furnish to the
Company in writing any information regarding the Buyer which the Company may
reasonably request in writing in connection with registration pursuant to this
Section 7.

            7.6 Transferability. The right to have the Company register
Registrable Stock granted by the Company to the Holders under this Agreement may
be assigned by a Holder to a permitted transferee or assignee of at least
one-half of the Registrable Stock (subject to appropriate adjustment for stock
splits, stock dividends, reclassification and consolidations), provided that the
Company must receive written notice prior to or at the time of said transfer,
stating the name and address of said transferee or assignee. The limitations set
forth in this Article 7 with respect to registration rights shall apply to all
transferees or assignees of Registrable Stock.

            8. Miscellaneous.

            8.1 Incorporation by Reference. All exhibits and schedules appended
to this Agreement are herein incorporated by reference and made a part hereof.

            8.2 Parties in Interest. All terms, covenants, agreements,
representations, warranties and undertakings in this Agreement made by and on
behalf of any of the parties hereto shall bind and inure to the benefit of the
respective successors and assigns of the parties hereto whether so expressed or
not.

            8.3 Amendments and Waivers. Changes in or additions to this
Agreement may be made or compliance with any term, covenant, agreement,
condition or provision set forth herein may be omitted or waived, only upon the
written consent of the Company and the Buyer.

            8.4 Governing Law. This Agreement shall be deemed a contract made
under the laws of the State of New York and, together with the rights or
obligations of the parties hereunder, shall be construed under and governed by
the laws of such State without giving effect to principles of conflicts of law.

                                       18
<PAGE>

            8.5 Notices. All notices, requests, consents and demands shall be in
writing and shall be deemed given when (i) personally delivered, (ii) mailed in
a registered or certified envelope, postage prepaid or (iii) sent by Federal
Express or another nationally recognized overnight delivery service (paid by
sender), or (iv) sent by telex, facsimile, or telecopier upon receipt of the
correct answerback.

To the Company at:

         Alliance Pharmaceutical Corp.
         6175 Lusk Boulevard
         San Diego, CA  92121
         Attention: Theodore D. Roth
                    President and Chief Operating Officer
                    Lloyd A. Rowland
                    Vice President and General Counsel
         Facsimile: (858) 410-5306

with a copy to:

         Stroock & Stroock & Lavan LLP
         180 Maiden Lane
         New York, NY  10038
         Attention: Melvin Epstein, Esq.
         Facsimile: (212) 806-6006

To the Buyer at:

         Baxter Healthcare Corporation
         Route 120 & Wilson Road
         Round Lake, Illinois  60073
         Attention: General Manager, Global Anesthesia
         Facsimile: (847) 270-2016

with a copy to:

         Baxter Healthcare Corporation
         One Baxter Parkway
         Deerfield, Illinois  60015
         Attention: General Counsel
         Facsimile: (847) 948-2450

with a copy to:

         Gibson, Dunn and Crutcher LLP
         4 Park Plaza, Suite 1800
         Irvine, California  92614

                                       19
<PAGE>

         Attention: Thomas Magill, Esq.
         Facsimile: (949) 451-4220

or such other address as may be furnished in writing to the other parties
hereto.

            8.6 Counterparts. This Agreement may be executed in counterparts,
all of which together shall constitute one and the same instrument.

            8.7 Effect of Headings. The section and paragraph headings herein
are for convenience only and shall not affect the construction hereof.

            8.8 Entire Agreement. This Agreement and the Exhibits and Schedules
hereto and thereto and the License Agreement constitute the entire agreement
between the Company and the Buyer with respect to the subject matter hereof.
There are no representations, warranties, covenants or undertakings with respect
to the subject matter hereof other than those expressly set forth herein. This
Agreement supersedes all prior agreements between the parties with respect to
the G Shares, the H Shares, the G Conversion Shares and the H Conversion Shares
subject thereto and the subject matter hereof.

            8.9 Publicity. Neither party shall originate any publicity, news
release, or other announcement, written or oral, relating to this agreement, or
to performance hereunder or the existence of an arrangement between the parties
without the prior written approval of the other, except as may be otherwise
required by law.

            8.10 Severability. The invalidity or unenforceability of any
provision hereof shall in no way affect the validity or enforceability of any
other provision.

            8.11 Successors and Assigns. Except as otherwise expressly provided
herein, the provisions hereof shall inure to the benefit of, and be binding
upon, the successors and assigns of the parties hereto.

            8.12 Amendment and Waiver. Except as otherwise provided herein, any
term of this Agreement may be amended and the observance of any term of this
Agreement may be waived (either generally or an a particular instance, either
retroactively or prospectively, and either for a specified period of time or
indefinitely), with the written consent of the Company and the Buyer in the case
of an amendment or by the written waiver of the waiving party in the case of a
waiver. Any amendment or waiver effected in accordance with this Section 9.12
shall be binding upon any holder of any securities purchased under this
Agreement (including securities into which such securities have been converted),
each future holder of all such securities (so long as such securities are
restricted securities) and the Company.

            8.13 Fees and Expenses. The Company and the Buyer shall bear their
own expenses and legal fees incurred on their behalf with respect to this
Agreement and the transactions contemplated hereby, except for any expenses
incurred in connection with the

                                       20
<PAGE>

registration of any of the securities sold pursuant to this Agreement which
shall be borne exclusively by the Company; except as otherwise provided in this
Agreement.

                                       21
<PAGE>

            IN WITNESS WHEREOF, this Agreement has been executed as of the date
first above written, by the parties hereto.

                                ALLIANCE PHARMACEUTICAL CORP.

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

                               BAXTER HEALTHCARE CORPORATION

                                By:
                                    --------------------------------------------
                                Name:
                                Title:<PAGE>

                                                               Exhibit 10(ww)

                         ALLIANCE/PFC SECURITY AGREEMENT

      THIS ALLIANCE/PFC SECURITY AGREEMENT (this "Security Agreement") is made
as of this 19th day of May, 2000, by and between Alliance Pharmaceutical Corp.,
a New York corporation (the "Debtor"), and PFC Therapeutics, LLC, a Delaware
limited liability company (the "Secured Party").

      1. OBLIGATIONS SECURED. The security interest granted by this Security
Agreement shall secure performance of all obligations and responsibilities of
the Debtor (collectively the "Secured Obligations") arising out of, connected
with or related to Section 6.3(b)(i) of the Limited Liability Company Operating
Agreement of PFC Therapeutics, LLC dated as of May 17, 2000, between the Debtor
and Baxter Healthcare Corporation (the "Operating Agreement").

      2. GRANT OF SECURITY INTEREST. The Debtor does hereby grant to the Secured
Party a security interest in the collateral described or referred to in Section
3 to secure the Secured Obligations.

      3. COLLATERAL. Debtor's collateral subject to the security interest
("Collateral") shall consist of all right, title and interest of the Debtor to
and in the following:

            (a) all Copyrights, Trade Secrets, Improvements, designs, drawings,
      plans, specifications, methods, systems, clinical data, processes,
      practices compositions, techniques and other technical information or
      documentation, whether patentable or not, solely owned by the Debtor, or
      which the Debtor has or obtains the right to control the use of through a
      license or otherwise, relating to the Product, now or hereafter acquired
      (the "Know-How");

            (b) all patents listed in Schedule A attached hereto or added
      thereto during the term of this Security Agreement;

            (c) all patent applications listed in Schedule B attached hereto or
      added thereto during the term of this Security Agreement, and any
      division, continuation, or continuation-in-part of any such application,
      and any patent which shall issue based on such application, division,
      continuation or continuation-in-part;

            (d) all patents which are reissues or extensions of, or patents of
      addition to, all patents identified in (b) or (c) above;

            (e) all patents or patent applications related to or based on any
      Know-How, which were conceived, developed, reduced to practice, licensed
      or acquired by the Debtor prior to or during the term of the Operating
      Agreement and which are necessary for the manufacture, use or sale of the
      Product and any division, continuation or continuation-in-part of any such
      patent or patent application; and any patent which shall

* Indicates confidential information which has been omitted and filed separately
with The Securities and Exchange Commission.

                                       1
<PAGE>

      issue based on such application, division, continuation or
      continuation-in-part; and any patent which is a reissue or extension of,
      or a patent of addition to, any such patent;

            (f) income, royalties, damages and payments now and hereafter due or
      payable with respect to the patents and patent applications identified in
      (b) through (e) above, including damages and payments for past or future
      infringements thereof;

            (g) rights to sue for past, present and future infringements with
      respect to the patents and patent applications identified in (b) through
      (e) above; and

            (h) all other rights corresponding to the patents identified in (b)
      through (e) above.

            As used herein, the "Product" shall mean all injectable
      perfluorochemical emulsions capable of transporting oxygen in therapeutic
      effective amounts in the bloodstream for all medical uses, including
      therapeutic and diagnostic, that the Debtor has evaluated, developed or
      acquired prior to the date of the Operating Agreement, or that will be
      evaluated, developed or acquired under the Operating Agreement, to the
      extent that such emulsions are owned or controlled by the Debtor.

            "Copyrights" shall mean (i) works of authorship fixed in any
      tangible medium of expression, now known or later developed, from which
      such works can be perceived, reproduced or otherwise communicated, either
      directly or with the aid of a machine or device (ii) copyright
      registrations and copyright applications and renewals and extensions
      thereof; (iii) income, royalties, damages and payments now and hereafter
      due or payable to the Debtor with respect thereto, including damages and
      payments for past or future infringements thereof; (iv) rights to sue for
      past, present and future infringements thereof; and (v) all other rights
      corresponding thereto.

            "Trade Secrets" shall mean any formula, pattern, device, or
      compilation of information which is used in business related to the
      Product, and which provides one an opportunity to obtain an advantage over
      competitors who do not know or use it and any (i) income, royalties,
      damages and payments now and hereafter due or payable to the Debtor with
      respect thereto, including damages and payments for past or future
      infringements or misappropriations thereof; (iv) rights to sue for past,
      present and future infringements or misappropriations thereof; and (v) all
      other rights corresponding thereto.

            "Improvements" shall mean any invention, information, enhancement,
      development, technology or modification, of any nature or form, and any
      part or combination of parts, or method of using or manufacturing such
      party or combination of parts, developed prior to or during the term of
      the Operating Agreement, including without limitation the development of
      new structures or compositions or the use of which affects the Product in
      any of the following ways: reduces production costs, improves performance,
      improves the manufacturing process, broadens applicability or increases
      marketability.

      4.    REPRESENTATIONS, WARRANTIES OF THE DEBTOR.

                                       1
<PAGE>

            (a) The Debtor has full power and authority to grant security
      interests in the Collateral, and to execute, deliver, and perform in
      accordance with the terms of this Security Agreement, without the consent
      or approval of any other person or entity;

            (b) The Collateral is free and clear of all liens and adverse claims
      other than those created hereunder, and the security interest created
      hereby shall be a first lien on the Collateral; and

            (c) This Security Agreement constitutes the legal, valid and binding
      obligation of the Debtor enforceable against the Debtor in accordance with
      its terms and constitutes a good, valid and subsisting security interest
      in all of the Collateral.

      5. COVENANTS OF THE DEBTOR. Subject to the terms and provisions of the
License Agreement dated as of May 19, 2000, between the Debtor and the Secured
Party (the "License Agreement"), and acknowledging that the terms of the License
Agreement will govern in the event of a conflict between the License Agreement
and this Security Agreement, the Debtor hereby covenants that:

            (a) The Debtor shall, at its own cost and expense, (i) take any and
      all actions necessary to preserve, protect and defend the security
      interest of the Secured Party in the Collateral created hereunder and the
      priority thereof against any and all adverse claims, and (ii) keep the
      Collateral free and clear of any and all liens, security interests (except
      for any security created as part of this Security Agreement) and/or
      adverse claims (including, without limitation all taxes, assessments and
      other levies);

            (b) The Debtor shall promptly reimburse the Secured Party for any
      and all sums, including costs, expenses and attorneys' fees, which the
      Secured Party may pay or incur in defending, protecting or enforcing the
      security interest of this Security Agreement or the priority thereof, or
      in enforcing the Secured Obligations, or in discharging any prior or
      subsequent lien or adverse claim against the Collateral or any part
      thereof, or by reason of becoming or being made a party to or intervening
      in any action or proceeding affecting the Collateral or the rights of the
      Secured Party therein, all of which actions the Secured Party shall have
      the right to take;

            (c) The Debtor shall not, without the prior written consent of the
      Secured Party, sell, assign, lease, or otherwise dispose of the
      Collateral, or any part thereof or any interest therein;

            (d) The Debtor shall not do, or permit or suffer to be done,
      anything that may impair the value of the Collateral or the security
      intended to be effected hereby and shall use its best efforts to preserve,
      protect and enhance the value of the Collateral;

            (e) The Debtor shall from time to time make, execute, acknowledge
      and deliver all such further documents, instruments and assurances as may
      be requested by the Secured Party to perfect or preserve the security
      interest created by and to carry out the intent of this Security
      Agreement, and hereby authorizes the Secured Party to file financing
      statements and amendments thereto relating to all or any part of the
      Collateral

                                       2
<PAGE>

      where desirable in the Secured Party's judgment to perfect the security
      interest granted herein without the signature of the Debtor (where
      permitted by law).

      6. PRESERVATION OF COLLATERAL. Subject to the terms and provisions of the
License Agreement, and acknowledging that the terms of the License Agreement
will govern in the event of a conflict between the License Agreement and this
Security Agreement, in case of any failure of the Debtor to keep the Collateral
free from liens or adverse claims, or to pay taxes on or in respect thereof, or
to fully and punctually keep and perform any other covenant hereof, then the
Secured Party may (but shall not be required to) pay or contest or settle such
taxes, liens, or adverse claims, or any judgments based thereon, or otherwise
make good any other aforesaid failure of the Debtor. The Debtor covenants to
promptly reimburse to the Secured Party (together with costs, expenses and
attorneys' fees) any sums (i) paid or advanced for any such purpose, (ii)
disbursed to protect the Collateral or the security interest created by this
Security Agreement and/or (iii) which the Debtor has herein covenanted to
reimburse to the Secured Party. Such reimbursement shall be with interest, at
the maximum rate permitted by Delaware law on the date of this Security
Agreement.

      7. EVENTS OF DEFAULT. Each of the following shall constitute an Event of
Default by the Debtor:

            (a) The failure of the Debtor to punctually and faithfully observe
      or perform any of the covenants, conditions or obligations imposed upon
      the Debtor by the Secured Obligations;

            (b) The termination of existence or cessation of business by the
      Debtor;

            (c) The Insolvency of the Debtor, such that the sum of the Debtor's
      debts is greater than the value of all of the Debtor's property, at a fair
      market valuation, exclusive of: (i) property transferred, concealed or
      removed with intent to hinder, delay or defraud such entity's creditors;
      and (ii) property that may be exempted from property of the Debtor's
      estate;

            (d) The assignment for the benefit of creditors by the Debtor, or
      the commencement of a case under title 11 of the United States Code
      (Bankruptcy) by or against the Debtor; and

            (e) The appointment of a receiver, trustee or custodian for or over
      the Debtor or any of the Debtor's property not vacated within 10 days
      thereafter.

      8. RIGHTS OF SECURED PARTY UPON DEFAULT. Upon the occurrence of an Event
of Default, the Secured Party shall have all of the rights and remedies of a
secured party under any and all applicable federal and state laws, subject to
the procedures set forth in Article 15 of the Operating Agreement.

      9. SUCCESSORS AND ASSIGNS. The Security Agreement shall be binding upon
successors and assigns of the Debtor.

                                       3
<PAGE>

      10. REMEDIES NOT EXCLUSIVE; NO WAIVERS; FORECLOSURES. No right or remedy
herein is exclusive of any other right or remedy. Each and every right and
remedy shall be cumulative and shall be in addition to every other remedy given
hereunder or now or hereafter existing at law or in equity, and may be exercised
from time to time as often as deemed expedient, separately or concurrently. The
failure or delay of the Secured Party to insist in any one or more instances
upon the performance of any of the terms, covenants or conditions of this
Security Agreement, or to exercise any right, remedy or privilege herein
conferred, shall not impair or be construed as thereafter waiving any such
covenants, remedies, conditions or provisions, but every such term, condition
and covenant shall continue and remain in full force and effect; nor shall the
giving, taking or enforcement of or execution against any other or additional
security, collateral, or guaranty for the payment of the Secured Obligations
operate to prejudice, waive or affect any rights, powers or remedies hereunder;
nor shall the Secured Party be required to first look to, enforce, exhaust or
execute against such other or additional security, or guarantees prior to so
acting against the Collateral. The Secured Party may foreclose on or execute
against the items of Collateral in such order as the Secured Party may, in its
sole and unfettered discretion, determine.

      11. SEVERABILITY. The unenforceability or invalidity of any provision or
provisions of this Security Agreement shall not render any other provision or
provisions herein contained unenforceable or invalid.

      12. COOPERATION. The Debtor agrees to cooperate with the Secured Party to
take any action necessary, including the filing of this Security Agreement,
financing statements and related documentation with governmental entities, to
perfect a security interest in the Collateral in favor of the Secured Party in
all jurisdictions where the Secured Party may deem it necessary or advisable to
do so. The Debtor hereby grants to the Secured Party, and agrees to execute any
appropriate documentation evidencing, a power of attorney providing the Secured
Party with the authority to file, update or supplement, on the Debtor's behalf,
applications, claims and filings with the United States Patent and Trademark
Office and/or other United States or foreign government entities.

      13. NOTICE. All notices, demands and communications hereunder shall be in
writing and shall be deemed to be duly given upon personal delivery or two (2)
days after deposit in the United States mail by registered or certified mail,
postage pre-paid, return receipt requested, addressed to the parties at the
addresses herein set forth, or at such other address as any party shall have
furnished to the other parties in writing:

            If to the Debtor:

                  Alliance Pharmaceutical Corp.
                  6175 Lusk Boulevard
                  San Diego, CA 92121
                  Attn: President
                  Attn: General Counsel
                  Facsimile: (858) 410-5306

            with a copy to:

                                       4
<PAGE>

                  Stroock & Stroock & Lavan LLP
                  180 Maiden Lane
                  New York, New York 10038
                  Facsimile: (212) 806-6006
                  Attn: Melvin Epstein, Esq.

            If to the Secured Party:

                  Baxter Healthcare Corporation
                  Route 120 & Wilson Road
                  Round Lake, Illinois 60073
                  Attention: General Manager, Global Anesthesia
                  Facsimile: (847) 270-2016

            with a copy to:

                  General Counsel
                  Baxter Healthcare Corporation
                  One Baxter Parkway
                  Deerfield, IL 60015
                  Fax: (847) 948-2450

            with a copy to:

                  Gibson, Dunn & Crutcher LLP
                  4 Park Plaza
                  Jamboree Center
                  Irvine, California 92614
                  Fax: (949) 451-4220
                  Attn: Thomas D. Magill, Esq.

      14. CHOICE OF LAW. This Security Agreement shall be governed by and
construed in accordance with the laws of the State of New York, except laws
respecting conflicts of law.

      15. ATTORNEYS' FEES. Should either party hereto institute any action or
proceeding to enforce this Security Agreement or any provisions hereof or for a
declaration of rights under this Security Agreement, or for arbitration of any
dispute arising under this Security Agreement, the prevailing party in any such
action, proceeding or arbitration shall be entitled to receive from the other
party all costs and expenses, including without limitation reasonable attorneys'
fees, incurred by the prevailing party in connection with such action,
proceeding or arbitration.

      16. TIME IS OF THE ESSENCE. Time is of the essence in this Security
Agreement.

                                       5
<PAGE>

      17. ASSIGNMENT BY SECURED PARTY. The Secured Party and each assignee may
assign this Security Agreement and the obligations made under it without the
consent of the Debtor, and each assignee is to be entitled to all the rights and
remedies of the Secured Party.

      18. COUNTERPARTS. Facsimile transmission of any signed original document
and/or retransmission of any signed facsimile transmission will be deemed the
same as delivery of an original. At the request of any party, the parties will
confirm facsimile transmission by signing a duplicate original document. This
Security Agreement may be executed in counterparts, each of which shall be
deemed an original, but all of which shall constitute but one and the same
instrument.

                             [Signatures to follow.]

                                       6
<PAGE>

      IN WITNESS WHEREOF, the Debtor and the Secured Party have caused this
Security Agreement to be duly signed and delivered as of the date first written
above.

                                        Debtor:

                                        ALLIANCE PHARMACEUTICAL CORP.

                                        By:_________________________________

                                        Name:_______________________________

                                        Title:______________________________

                                        Secured Party:

                                        PFC THERAPEUTICS, LLC

                                        By:_________________________________

                                        Name:_______________________________

                                        Title:______________________________

<PAGE>

                                                                      SCHEDULE A
                                                           to Security Agreement

                                     PATENTS

<TABLE>
<CAPTION>

            =================              =================
                 COUNTRY                       PATENT NO.
            =================              =================
            <S>                            <C>
                   U.S.                        4,865,836
            -----------------              -----------------
                Australia                         599068
            -----------------              -----------------
                  Canada                       1,279,011
            -----------------              -----------------
              South Africa                       87/0252
            -----------------              -----------------
                 Norway                           173214
            -----------------              -----------------
                  Japan                          1943385
            -----------------              -----------------
                 Europe                        0 231 070
            -----------------              -----------------
                Hong Kong                      HK1011504
            -----------------              -----------------
                   U.S.                        5,080,885
            -----------------              -----------------
                   U.S.                        5,393,513
            -----------------              -----------------
                   U.S.                        4,987,154
            -----------------              -----------------
                Australia                         608880
            -----------------              -----------------
                 Canada                        1,316,820
            -----------------              -----------------
                 Europe                        0 307 087
            -----------------              -----------------
                  Japan                          1842180
            -----------------              -----------------
               South Africa                      88/5796
            -----------------              -----------------
                 Ireland                           64245
            -----------------              -----------------
                 Norway                           179162
            -----------------              -----------------
                   U.S.                        5,284,645
            -----------------              -----------------
                Australia                         648757
            -----------------              -----------------
                   U.S.                        5,847,009
            -----------------              -----------------
                   U.S.                        4,927,623
            -----------------              -----------------
                   U.S.                        5,077,036
            -----------------              -----------------
                Australia                         647372
            -----------------              -----------------
                 Canada                        1,333,877
            -----------------              -----------------
                 Canada                        1,335,714
            -----------------              -----------------
                 Canada                        1,338,854
            -----------------              -----------------
                 Europe                        0 480 925
            -----------------              -----------------
                  Japan                        3,002,486
            -----------------              -----------------

</TABLE>

<PAGE>

<TABLE>
<CAPTION>

            =================              =================
                 COUNTRY                       PATENT NO.
            =================              =================
            <S>                            <C>
                   U.S.                        5,628,930
            -----------------              -----------------
                   U.S.                        5,914,352
            -----------------              -----------------
                Australia                         678418
            -----------------              -----------------
                 Europe                        0 666 736
            -----------------              -----------------
                   U.S.                        5,344,393
            -----------------              -----------------
                   U.S.                        5,451,205
            -----------------              -----------------
                 Europe                        0 627 913
            -----------------              -----------------
                   U.S.                        5,635,538
            -----------------              -----------------
                Australia                         679052
            -----------------              -----------------
                Australia                         710142
            -----------------              -----------------
                 Europe                        0 689 422
            -----------------              -----------------
                   U.S.                        5,865,784
            -----------------              -----------------
                   U.S.                        6,007,774
            -----------------              -----------------
                   U.S.                        5,726,209
            -----------------              -----------------
                   U.S.                        4,742,050
            -----------------              -----------------
                   U.S.                        4,889,525
            -----------------              -----------------
                   U.S.                        4,769,241
            -----------------              -----------------
                   U.S.                        4,919,895
            -----------------              -----------------
                  Canada                       1,288,045
            -----------------              -----------------
                  Europe                       0 265 082
            -----------------              -----------------
                   U.S.                        4,815,446
            -----------------              -----------------
                  Canada                       1,281,656
            -----------------              -----------------
                 Europe                        0 201 275
            -----------------              -----------------
                  Japan                        2,681,147
            -----------------              -----------------
                   U.S.                        5,061,484
            -----------------              -----------------
                   U.S.                        5,374,243
            -----------------              -----------------
                   U.S.                        5,073,383
            -----------------              -----------------
                   U.S.                        4,402,984
            -----------------              -----------------
                   U.S.                        4,461,717
            -----------------              -----------------
                   U.S.                        4,975,468
            -----------------              -----------------
                 Europe                        0 391 637
            -----------------              -----------------
                   U.S.                        4,993,415
            -----------------              -----------------
                Australia                         635899
            -----------------              -----------------

</TABLE>

<PAGE>

<TABLE>
<CAPTION>

            =================              =================
                 COUNTRY                       PATENT NO.
            =================              =================
            <S>                            <C>
                 Europe                        0 429 539
            -----------------              -----------------
                 Canada                        1,338,617
            -----------------              -----------------
                 France                        2,602,774
            -----------------              -----------------
                   U.S.                        4,985,550
            -----------------              -----------------
                Australia                         608761
            -----------------              -----------------
                 Europe                        0 255 443
            -----------------              -----------------
               New Zealand                        221232
            -----------------              -----------------
                 Portugal                         85 425
            -----------------              -----------------
                 Canada                        1,315,778
            -----------------              -----------------
                 Ireland                           61102
            -----------------              -----------------
                  Japan                        2,110,228
            -----------------              -----------------
                 Norway                           169542
            -----------------              -----------------
                   U.S.                        5,344,930
            -----------------              -----------------
                Australia                         639008
            -----------------              -----------------
                 Europe                        0 478 686
            -----------------              -----------------
                  Japan                        2,849,471
            -----------------              -----------------
                 France                        2,665,705
            -----------------              -----------------
                   U.S.                        5,527,962
            -----------------              -----------------
                 Europe                        0 548 096
            -----------------              -----------------
                Australia                         647176
            -----------------              -----------------
                   U.S.                        5,703,126
            -----------------              -----------------
                   U.S.                        5,847,206
            -----------------              -----------------
                 France                        2,677,360
            -----------------              -----------------
                   U.S.                        5,846,516
            -----------------              -----------------
                   U.S.                        5,679,459
            -----------------              -----------------

</TABLE>

<PAGE>

                                                                      SCHEDULE B

                               Patent Applications

              ====================================================
                       Country               Application No.
              ====================================================
                          *
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