Document:

REGISTRATION RIGHTS
AGREEMENT 

        This
Registration Rights Agreement (this “Agreement”) is made and entered into
as of September 21, 2004, by and among Alliance Pharmaceutical Corp., a New York
corporation (the “Company”), and the Lenders named in that certain Senior
Convertible Note Purchase Agreement dated September 21, 2004 by and among the Company and
such Lenders (the “Purchase Agreement”). 

        The
Company and the Lenders hereby agree as follows: 

    1.       Definitions.
Capitalized terms used and not otherwise defined herein that           are defined in the
Purchase Agreement will have the meanings given such terms in           the Purchase
Agreement. As used in this Agreement, the following terms have the           respective
meanings set forth in this Section 1:  

        “Affiliate”
means, with respect to any person, any other person which directly or indirectly controls,
is controlled by, or is under common control with, such person. 

        “Commission”
means the United States Securities and Exchange Commission. 

        “Conversion
Shares” means the shares of Common Stock issuable upon conversion of the Notes. 

        “Exchange
Act” means the Securities Exchange Act of 1934, as amended. 

        “Holder”
or “Holders” means the holder or holders, as the case may be, from time
to time of Registrable Securities. 

        “Lenders”
means the Lenders identified in the Purchase Agreement and any Affiliate or permitted
transferee of any Lender who is a subsequent holder of any Note or Registrable Securities. 

        “New
York Courts” means the state and federal courts sitting in the City of New York,
Borough of Manhattan. 

        “Proceeding”
means an action, claim, suit, investigation or proceeding (including, without limitation,
an investigation or partial proceeding, such as a deposition), whether commenced or
threatened. 

        “Prospectus”
means the prospectus included in a Registration Statement (including, without limitation,
a prospectus that includes any information previously omitted from a prospectus filed as
part of an effective registration statement in reliance upon Rule 430A promulgated under
the Securities Act), as amended or supplemented by any prospectus supplement, with respect
to the terms of the offering of any portion of the Registrable Securities covered by a
Registration Statement, and all other amendments and supplements to the Prospectus,
including post-effective amendments, and all material incorporated by reference or deemed
to be incorporated by reference in such Prospectus. 

        “Registrable
Securities” means: (i) the Conversion Shares and (ii) any securities issued or
issuable upon any stock split, dividend or other distribution, recapitalization or similar
event with respect to the Conversion Shares, or any conversion price adjustment with
respect to the Notes issued pursuant to the Purchase Agreement. 

        “Registration
Statement” means the initial registration statement required to be filed in
accordance with Section 2(a)(i) and any additional registration statement(s) required to
be filed under Section 2(a)(ii), including (in each case) the Prospectus, amendments and
supplements to such registration statements or Prospectus, including pre- and
post-effective amendments, all exhibits thereto, and all material incorporated by
reference or deemed to be incorporated by reference therein. 

        “Rule
144” means Rule 144 promulgated by the Commission pursuant to the Securities Act,
as such Rule may be amended from time to time, or any similar rule or regulation hereafter
adopted by the Commission having substantially the same effect as such Rule. 

        “Rule
415” means Rule 415 promulgated by the Commission pursuant to the Securities Act,
as such Rule may be amended from time to time, or any similar rule or regulation hereafter
adopted by the Commission having substantially the same effect as such Rule. 

        “Rule
424” means Rule 424 promulgated by the Commission pursuant to the Securities Act,
as such Rule may be amended from time to time, or any similar rule or regulation hereafter
adopted by the Commission having substantially the same effect as such Rule. 

        “Securities
Act” means the Securities Act of 1933, as amended. 

    2.        Registration.  

        (a)              Promptly
following the closing of the purchase and sale of the Notes           contemplated by the
Purchase Agreement (the “Closing Date”) but           no later than
September 30, 2004 (the “Filing Deadline”), the           Company shall
prepare and file with the Commission a Registration Statement on           Form SB-2 (or,
if Form SB-2 is not then available to the Company, on such form           of registration
statement as is then available to effect a registration for           resale of the
Registrable Securities), covering the resale of the Registrable           Securities in
an amount at least equal to the number of shares of Common Stock           necessary to
permit the conversion in full of the Notes. Such Registration           Statement shall
include the “Plan of Distribution” attached hereto as Exhibit A. Such
Registration Statement also shall cover, to the extent           allowable under the
Securities Act and the rules promulgated thereunder           (including Rule 416), such
indeterminate number of additional shares of Common           Stock resulting from stock
splits, stock dividends or similar transactions with           respect to the Registrable
Securities. The Company shall use its reasonable best           efforts to obtain from
each person who now has piggyback registration rights a           waiver of those rights
with respect to the Registration Statement. The           Registration Statement (and
each amendment or supplement thereto, and each           request for acceleration of
effectiveness thereof) shall be provided in           accordance with Section 4(a) to the
Lenders and their counsel prior to its           filing or other submission. If a
Registration Statement covering the Registrable           Securities is not filed with
the Commission on or prior to the Filing Deadline,           the Company will make pro
rata payments to each Lender, as liquidated damages           and not as a penalty, in an
amount equal to 1% of the aggregate amount invested           by such Lender for each
30-day period or pro rata for any portion thereof           following the date by which
such Registration Statement should have been filed           for which no Registration
Statement is filed with respect to the Registrable           Securities. Such payments
shall be in partial compensation to the Lenders, and           shall not constitute the
Lenders’ exclusive remedy for such events. Such           payments shall be made to
each Lender in cash. The amounts payable as liquidated           damages pursuant to this
paragraph shall be payable in lawful money of the           United States, and amounts
payable as liquidated damages shall be paid within           three (3) Business Days of
the last day of each such 30-day period during which           the Registration Statement
should have been filed for which no Registration           Statement was filed with
respect to the Registrable Securities.  

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    3.        Effectiveness.  

        (a)              The
Company shall use commercially reasonable efforts to have the Registration
          Statement declared effective as soon as practicable. The Company shall notify
          the Lenders by facsimile or e-mail as promptly as practicable, and in any
event,           within twenty-four (24) hours, after any Registration Statement is
declared           effective and shall simultaneously provide the Lenders with copies of
any           related Prospectus to be used in connection with the sale or other
disposition           of the securities covered thereby. If (A) a Registration Statement
covering the           Registrable Securities is not declared effective by the Commission
within thirty           (30) days after the September 30, 2004 (or sixty (60) days if
reviewed by the           SEC), or (B) after a Registration Statement has been
declared effective by           the Commission, sales cannot be made pursuant to such
Registration Statement for           any reason (including without limitation by reason
of a stop order, or the           Company’s failure to update the Registration
Statement), but excluding the           inability of any Lender to sell the Registrable
Securities covered thereby due           to market conditions and except as excused
pursuant to subparagraph (b) below, then the Company will make pro rata payments to
each Lender, as liquidated           damages and not as a penalty, in an amount equal to
1% of the aggregate amount           invested by such Lender for each 30- day period or
pro rata for any portion           thereof following the date by which such Registration
Statement should have been           effective (the “Blackout Period”).
Such payments shall be in           partial compensation to the Lenders, and shall not
constitute the Lenders’          exclusive remedy for such events. The amounts
payable as liquidated damages           pursuant to this paragraph shall be paid monthly
within three (3) Business Days           of the last day of each month following the
commencement of the Blackout Period           until the termination of the Blackout
Period. Such payments shall be made to           each Lender in cash.  

        (b)              For
not more than twenty (20) consecutive days or for a total of not more than
          forty-five (45) days in any twelve (12) month period, the Company may delay the
          disclosure of material non-public information concerning the Company, by
          suspending the use of any Prospectus included in any registration contemplated
          by this Section containing such information, the disclosure of which at the
time           is not, in the good faith opinion of the Company, in the best interests of
the           Company (an “Allowed Delay”); provided, that the Company
shall           promptly (a) notify the Lenders in writing of the existence of (but in no
event,           without the prior written consent of an Lender, shall the Company
disclose to           such Lender any of the facts or circumstances regarding) material
non-public           information giving rise to an Allowed Delay, (b) advise the Lenders
in writing           to cease all sales under the Registration Statement until the end of
the Allowed           Delay and (c) use commercially reasonable efforts to terminate an
Allowed Delay           as promptly as practicable.  

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    4.        Registration
Procedures.  

        In
connection with the Company’s registration obligations hereunder, the Company shall: 

        (a)              Not
less than five Trading Days prior to the filing of a Registration Statement           or
any related Prospectus or any amendment or supplement thereto, the Company
          shall furnish to each Holder copies of the “Selling Stockholders”          section
of such document, the “Plan of Distribution” and any risk           factor
contained in such document that addresses specifically this transaction           or the
Selling Stockholders, as proposed to be filed which documents will be           subject
to the review of such Holder. The Company shall not file a Registration
          Statement, any Prospectus or any amendments or supplements thereto in which the
          “Selling Stockholder” section thereof differs from the disclosure
          received from a Holder in its Selling Holder Questionnaire (as amended or
          supplemented).  

        (b)              (i)
Use commercially reasonable efforts to cause such Registration Statement to
          become effective and to remain continuously effective for a period that will
          terminate upon the earlier of (1) the date on which all Registrable Securities
          covered by such Registration Statement as amended from time to time, have been
          sold, and (2) the date on which all Registrable Securities covered by such
          Registration Statement may be sold pursuant to Rule 144(k) (the           “Effectiveness
Period”) and advise the Lenders in writing when           the Effectiveness
Period has expired; (ii) prepare and file with the Commission           such amendments,
including post-effective amendments, to each Registration           Statement and the
Prospectus used in connection therewith as may be necessary to           keep such
Registration Statement continuously effective as to the applicable           Registrable
Securities for its Effectiveness Period and prepare and file with           the
Commission such additional Registration Statements in order to register for
          resale under the Securities Act all of the Registrable Securities; (iii) cause
          the related Prospectus to be amended or supplemented by any required Prospectus
          supplement, and as so supplemented or amended to be filed pursuant to Rule 424;
          (iv) respond as promptly as reasonably possible to any comments received from
          the Commission with respect to each Registration Statement or any amendment
          thereto and, as promptly as reasonably possible provide the Holders true and
          complete copies of all correspondence from and to the Commission relating to
          such Registration Statement that would not result in the disclosure to the
          Holders of material and non-public information concerning the Company; and (v)
          comply in all material respects with the provisions of the Securities Act and
          the Exchange Act with respect to the Registration Statements and the
disposition           of all Registrable Securities covered by each Registration
Statement.  

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        (c)              Immediately
notify the Holders (and, in the case of (i)(A) below, not less than           three
Trading Days prior to such filing) and (if requested by any such Person)
          confirm such notice in writing no later than one Trading Day following the day
          (i)(A) when a Prospectus or any Prospectus supplement or post-effective
          amendment to a Registration Statement is proposed to be filed; (B) when the
          Commission notifies the Company whether there will be a “review” of
          such Registration Statement and whenever the Commission comments in writing on
          such Registration Statement (the Company shall provide true and complete copies
          thereof and all written responses thereto to each of the Holders that pertain
to           the Holders as a Selling Stockholder or to the Plan of Distribution, but not
          information which the Company believes would constitute material and non-public
          information); and (C) with respect to each Registration Statement or any
          post-effective amendment, when the same has become effective; (ii) of any
          request by the Commission or any other Federal or state governmental authority
          for amendments or supplements to a Registration Statement or Prospectus or for
          additional information; (iii) of the issuance by the Commission of any stop
          order suspending the effectiveness of a Registration Statement covering any or
          all of the Registrable Securities or the initiation of any Proceedings for that
          purpose; (iv) of the receipt by the Company of any notification with respect to
          the suspension of the qualification or exemption from qualification of any of
          the Registrable Securities for sale in any jurisdiction, or the initiation or
          threatening of any Proceeding for such purpose; and (v) of the occurrence of
any           event or passage of time that makes the financial statements included in a
          Registration Statement ineligible for inclusion therein or any statement made
in           such Registration Statement or Prospectus or any document incorporated or
deemed           to be incorporated therein by reference untrue in any material respect
or that           requires any revisions to such Registration Statement, Prospectus or
other           documents so that, in the case of such Registration Statement or the
Prospectus,           as the case may be, it will not contain any untrue statement of a
material fact           or omit to state any material fact required to be stated therein
or necessary to           make the statements therein, in light of the circumstances
under which they were           made, not misleading.  

        (d)              Use
its reasonable best efforts to avoid the issuance of, or, if issued, obtain           the
withdrawal of (i) any order suspending the effectiveness of a Registration
          Statement, or (ii) any suspension of the qualification (or exemption from
          qualification) of any of the Registrable Securities for sale in any
          jurisdiction, at the earliest practicable moment.  

        (e)              Upon
request, furnish to each Holder, without charge, at least one conformed           copy of
each Registration Statement and each amendment thereto and all exhibits           to the
extent requested by such Person (including those previously furnished)           promptly
after the filing of such documents with the Commission.  

        (f)              Promptly
deliver to each Holder, without charge, as many copies of each           Prospectus or
Prospectuses (including each form of prospectus) and each           amendment or
supplement thereto as such Persons may reasonably request. The           Company hereby
consents to the use of such Prospectus and each amendment or           supplement thereto
by each of the selling Holders in connection with the           offering and sale of the
Registrable Securities covered by such Prospectus and           any amendment or
supplement thereto.  

        (g)              Prior
to any public offering of Registrable Securities, to register or qualify           or
cooperate with the selling Holders in connection with the registration or
          qualification (or exemption from such registration or qualification) of such
          Registrable Securities for offer and sale under the securities or Blue Sky laws
          of all jurisdictions within the United States, to keep each such registration
or           qualification (or exemption therefrom) effective during the Effectiveness
Period           and to do any and all other acts or things necessary or advisable to
enable the           disposition in such jurisdictions of the Registrable Securities
covered by the           Registration Statements; provided, however, that the Company
shall not be           required in connection therewith as a condition thereto to qualify
to do           business or to file a general consent to service of process in any such
states           or jurisdictions.  

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        (h)              Cooperate
with the Holders to facilitate the timely preparation and delivery of
          certificates representing Registrable Securities to be delivered to a
transferee           pursuant to the Registration Statements, which certificates shall be
free, to           the extent permitted by the Purchase Agreement, of all restrictive
legends, and           to enable such Registrable Securities to be in such denominations
and registered           in such names as any such Holders may request.  

        (i)              Upon
the occurrence of any event contemplated by Section 3(c)(v), as promptly as
          reasonably possible, prepare a supplement or amendment, including a
          post-effective amendment, to the affected Registration Statements or a
          supplement to the related Prospectus or any document incorporated or deemed to
          be incorporated therein by reference, and file any other required document so
          that, as thereafter delivered, no Registration Statement nor any Prospectus
will           contain 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,
in           light of the circumstances under which they were made, not misleading.  

        (j)              Otherwise
use commercially reasonable efforts to comply with all applicable           rules and
regulations of the Commission under the Securities Act and the           Exchange Act,
take such other actions as may be reasonably necessary to           facilitate the
registration of the Registrable Securities hereunder; and make           available to its
security holders, as soon as reasonably practicable, but not           later than the
Availability Date (as defined below), an earnings statement           covering a period
of at least twelve (12) months, beginning after the effective           date of each
Registration Statement, which earnings statement shall satisfy the           provisions
of Section 11(a) of the Securities Act, including Rule 158           promulgated
thereunder (for the purpose of this subsection 3(j),           “Availability Date” means
the 45th day following the end of the           fourth fiscal quarter that includes the
effective date of such Registration           Statement, except that, if such fourth
fiscal quarter is the last quarter of the           Company’s fiscal year, “Availability
Date” means the 90th           day after the end of such fourth fiscal quarter).  

        (k)              With
a view to making available to the Lenders the benefits of Rule 144 (or its
          successor rule) and any other rule or regulation of the Commission that may at
          any time permit the Lenders to sell shares of Common Stock to the public
without           registration, the Company covenants and agrees to: (i) make and keep
public           information available, as those terms are understood and defined in Rule
144,           until the earlier of (A) six months after such date as all of the
Registrable           Securities may be resold pursuant to Rule 144(k) or any other rule
of similar           effect or (B) such date as all of the Registrable Securities shall
have been           resold; (ii) file with the Commission in a timely manner all reports
and other           documents required of the Company under the Exchange Act; and (iii)
furnish to           each Lender upon request, as long as such Lender owns any
Registrable           Securities, (A) a written statement by the Company that it has
complied with the           reporting requirements of the Exchange Act, (B) a copy of the
Company’s           most recent Annual Report on Form 10-K or Quarterly Report on
Form 10-Q, and (C)           such other information as may be reasonably requested in
order to avail such           Lender of any rule or regulation of the Commission that
permits the selling of           any such Registrable Securities without registration.  

6 

    5.        Registration
Expenses. All fees and expenses incident to the performance           of or
compliance with this Agreement by the Company shall be borne by the           Company
whether or not any Registrable Securities are sold pursuant to a           Registration
Statement. The fees and expenses referred to in the foregoing           sentence shall
include, without limitation, (i) all registration and filing fees           (including,
without limitation, fees and expenses (A) with respect to filings           required to
be made with any Trading Market on which the Common Stock is then           listed for
trading, and (B) in compliance with applicable state securities or           Blue Sky
laws), (ii) printing expenses (including, without limitation, expenses           of
printing certificates for Registrable Securities and of printing prospectuses
          if the printing of prospectuses is reasonably requested by the holders of a
          majority of the Registrable Securities included in the Registration Statement),
          (iii) messenger, telephone and delivery expenses, (iv) fees and disbursements
of           counsel for the Company, (v) Securities Act liability insurance, if the
Company           so desires such insurance, and (vi) fees and expenses of all other
Persons           retained by the Company in connection with the consummation of the
transactions           contemplated by this Agreement. In addition, the Company shall be
responsible           for all of its internal expenses incurred in connection with the
consummation of           the transactions contemplated by this Agreement (including,
without limitation,           all salaries and expenses of its officers and employees
performing legal or           accounting duties), the expense of any annual audit and the
fees and expenses           incurred in connection with the listing of the Registrable
Securities on any           securities exchange as required hereunder. Each Holder shall
pay all           underwriting discounts, selling commissions or other selling expenses
incurred           in connection with any sale or other disposition of Registrable
Securities.  

        (a)    Due
Diligence Review; Information. Subject to subsection (b) below, the           Company
shall make available, during normal business hours, for inspection and           review
by the Lenders, advisors to and representatives of the Lenders (who may           or may
not be affiliated with the Lenders and who are reasonably acceptable to           the
Company), all financial and other records, all SEC Filings (as defined in           the
Purchase Agreement) and other filings with the Commission, all other           corporate
documents and properties of the Company as may be reasonably necessary           for the
purpose of such review, and cause the Company’s officers, directors           and
employees, within a reasonable time period, to supply all such information
          reasonably requested by the Lenders or any such representative, advisor or
          underwriter in connection with such Registration Statement (including, without
          limitation, in response to all questions and other inquiries reasonably made or
          submitted by any of them), prior to and from time to time after the filing and
          effectiveness of the Registration Statement, all such information for the sole
          purpose of enabling the Lenders and such representatives, advisors and
          underwriters and their respective accountants and attorneys to conduct initial
          and ongoing due diligence with respect to the Company and the accuracy of such
          Registration Statement.  

        (b)    Material,
Non-Public Information. After the Closing (as defined in the           Purchase
Agreement), the Company shall not disclose material non-public           information to
any Lender, or to advisors or representatives of such Lender,           unless prior to
disclosure of such information the Company identifies such           information as being
material, non-public information and provides such Lender,           advisor or
representative with the opportunity to accept or refuse to accept           such
material, non-public information for review and if such Lender wishes to           obtain
such information, such Lender enters into an appropriate confidentiality
          agreement with the Company with respect thereto.  

7 

    6.        Obligations
of the Lenders.  

        (a)              Each
Lender agrees to furnish to the Company a completed Questionnaire in the           form
attached to this Agreement as Annex B (a “Selling Holder
          Questionnaire”) at least two (2) Business Days prior to the first
          anticipated filing date of such Registration Statement if such Lender elects to
          have any of the Registrable Securities included in the Registration Statement.
          If any Lender fails to provide a complete and accurate Selling Holder
          Questionnaire at least two (2) Business Days prior to the first anticipated
          filing date of such Registration Statement, then such Lender shall be deemed to
          have waived and relinquished the registration rights set forth in this
Agreement           and shall thereafter not be entitled to any liquidated damages as
provided for           herein.  

        (b)              Each
Lender, by its acceptance of the Registrable Securities agrees to cooperate
          with the Company as reasonably requested by the Company in connection with the
          preparation and filing of a Registration Statement hereunder, unless such
Lender           has notified the Company in writing of its election to exclude all of
its           Registrable Securities from such Registration Statement.  

        (c)              Each
Lender agrees that, upon receipt of any notice from the Company of either           (i)
the commencement of an Allowed Delay pursuant to Section 2(b)(ii) or (ii)           the
happening of an event pursuant to Section 3(c)(i)(C) hereof, such Lender           will
immediately discontinue disposition of Registrable Securities pursuant to           the
Registration Statement covering such Registrable Securities, until the           Lender’s
receipt of the copies of the supplemented or amended prospectus           filed with the
Commission and until any related post-effective amendment is           declared effective
and, if so directed by the Company, the Lender shall deliver           to the Company (at
the expense of the Company) or destroy (and deliver to the           Company a
certificate of destruction) all copies in the Lender’s possession           of the
Prospectus covering the Registrable Securities current at the time of           receipt
of such notice.  

    7.        Indemnification.  

        (a)    Indemnification
by the Company. The Company will indemnify and hold           harmless each Holder
and its officers, directors, members, employees and agents,           successors and
assigns, and each other person, if any, who controls such Holder           within the
meaning of the Securities Act, against any losses, claims, damages or
          liabilities, (including reasonable attorney fees) (collectively,
          “Losses”), joint or several, to which they may become subject
          under the Securities Act or otherwise, insofar as such Losses (or actions in
          respect thereof) arise out of or are based upon: (i) any untrue statement or
          alleged untrue statement of any material fact contained in any Registration
          Statement, any preliminary prospectus or final prospectus contained therein, or
          any amendment or supplement thereof; (ii) any blue sky application or other
          document executed by the Company specifically for that purpose or based upon
          written information furnished by the Company filed in any state or other
          jurisdiction in order to qualify any or all of the Registrable Securities under
          the securities laws thereof (any such application, document or information
          herein called a “Blue Sky Application”); (iii) the
          omission or alleged omission to state therein a material fact required to be
          stated therein or necessary to make the statements therein not misleading; (iv)
          any violation by the Company or its agents of any rule or regulation
promulgated           under the Securities Act applicable to the Company or its agents
and relating to           action or inaction required of the Company in connection with
such registration;           or (v) any failure to register or qualify the Registrable
Securities included in           any such Registration in any state where the Company or
its agents has           affirmatively undertaken or agreed in writing that the Company
will undertake           such registration or qualification on an Lender’s behalf
and will reimburse           such Holder, and each such officer, director or member and
each such 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
Company will not be liable in           any such case if and to the extent that any such
loss, claim, damage or           liability arises out of or is based upon an untrue
statement or alleged untrue           statement or omission or alleged omission so made
in conformity with information           furnished by such Lender or any such controlling
person in writing specifically           for use in such Registration Statement or
Prospectus  

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        (b)    Indemnification
by Holders. Each Holder agrees, severally but not           jointly, to indemnify and
hold harmless, to the fullest extent permitted by law,           the Company, its
directors, officers, employees and each person who controls the           Company (within
the meaning of the Securities Act) against any Losses resulting           from (i) any
untrue statement of a material fact or any omission of a material           fact required
to be stated in the Registration Statement or Prospectus or           preliminary
prospectus or amendment or supplement thereto or necessary to make           the
statements therein not misleading, to the extent, but only to the extent           that
such untrue statement or omission is contained in any information furnished           in
writing by such Holder to the Company specifically for inclusion in such
          Registration Statement or Prospectus or amendment or supplement thereto, or
(ii)           any violation by such Holder of the Securities Act. In no event shall the
          liability of a Holder be greater in amount than the dollar amount of the
          proceeds (net of all expense paid by such Lender in connection with any claim
          relating to this Section 7 and the amount of any damages such Lender has
          otherwise been required to pay by reason of such untrue statement or omission)
          received by such Lender upon the sale of the Registrable Securities included in
          the Registration Statement giving rise to such indemnification obligation.  

        (c)    Conduct
of Indemnification Proceedings. If any Proceeding shall be           brought or
asserted against any Person entitled to indemnity hereunder (an           “Indemnified
Party”), such Indemnified Party shall promptly           notify the Person from
whom indemnity is sought (the “Indemnifying           Party”) in
writing, and the Indemnifying Party shall assume the defense           thereof, including
the employment of counsel reasonably satisfactory to the           Indemnified Party and
the payment of all fees and expenses incurred in           connection with defense
thereof; provided, that the failure of any Indemnified           Party to give such
notice shall not relieve the Indemnifying Party of its           obligations or
liabilities pursuant to this Agreement, except (and only) to the           extent that it
shall be finally determined by a court of competent jurisdiction           (which
determination is not subject to appeal or further review) that such           failure
shall have proximately and materially adversely prejudiced the           Indemnifying
Party.  

        (d)              An
Indemnified Party shall have the right to employ separate counsel in any such
          Proceeding and to participate in the defense thereof, but the fees and expenses
          of such counsel shall be at the expense of such Indemnified Party or Parties
          unless: (1) the Indemnifying Party has agreed in writing to pay such fees and
          expenses; (2) the Indemnifying Party shall have failed promptly to assume the
          defense of such Proceeding and to employ counsel reasonably satisfactory to
such           Indemnified Party in any such Proceeding; or (3) the named parties to any
such           Proceeding (including any impleaded parties) include both such Indemnified
Party           and the Indemnifying Party, and such Indemnified Party shall have been
advised           by counsel that a conflict of interest is likely to exist if the same
counsel           were to represent such Indemnified Party and the Indemnifying Party (in
which           case, if such Indemnified Party notifies the Indemnifying Party in
writing that           it elects to employ separate counsel at the expense of the
Indemnifying Party,           the Indemnifying Party shall not have the right to assume
the defense thereof           and such counsel shall be at the expense of the
Indemnifying Party). The           Indemnifying Party shall not be liable for any
settlement of any such Proceeding           effected without its written consent, which
consent shall not be unreasonably           withheld. No Indemnifying Party shall,
without the prior written consent of the           Indemnified Party, effect any
settlement of any pending Proceeding in respect of           which any Indemnified Party
is a party, unless such settlement includes an           unconditional release of such
Indemnified Party from all liability on claims           that are the subject matter of
such Proceeding.  

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        (e)              All
fees and expenses of the Indemnified Party (including reasonable fees and
          expenses to the extent incurred in connection with investigating or preparing
to           defend such Proceeding in a manner not inconsistent with this Section) shall
be           paid to the Indemnified Party, as incurred, within ten Trading Days of
written           notice thereof to the Indemnifying Party (regardless of whether it is
ultimately           determined that an Indemnified Party is not entitled to
indemnification           hereunder; provided, that the Indemnifying Party may require
such Indemnified           Party to undertake to reimburse all such fees and expenses to
the extent it is           finally judicially determined that such Indemnified Party is
not entitled to           indemnification hereunder).  

        (f)    Contribution.
If for any reason the indemnification provided for in the           preceding paragraphs
(a) and (b) is unavailable to an indemnified party or           insufficient to hold it
harmless, other than as expressly specified therein,           then the Indemnifying
Party shall contribute to the amount paid or payable by           the Indemnified Party
as a result of such loss, claim, damage or liability in           such proportion as is
appropriate to reflect the relative fault of the           Indemnified Party and the
Indemnifying Party, as well as any other relevant           equitable considerations. No
person guilty of fraudulent misrepresentation           within the meaning of Section
11(f) of the Securities Act shall be entitled to           contribution from any person
not guilty of such fraudulent misrepresentation. In           no event shall the
contribution obligation of a holder of Registrable Securities           be greater in
amount than the dollar amount of the proceeds (net of all expenses           paid by such
holder in connection with any claim relating to this Section 7 and           the amount
of any damages such holder has otherwise been required to pay by           reason of such
untrue or alleged untrue statement or omission or alleged           omission) received by
it upon the sale of the Registrable Securities giving rise           to such contribution
obligation.  

        The
indemnity and contribution agreements contained in this Section are in addition to any
liability that the Indemnifying Parties may have to the Indemnified Parties. 

    8.        Miscellaneous.  

        (a)    Remedies.
In the event of a breach by the Company or by a Holder, of any           of their
obligations under this Agreement, each Holder or the Company, as the           case may
be, in addition to being entitled to exercise all rights granted by law           and
under this Agreement, including recovery of damages, will be entitled to
          specific performance of its rights under this Agreement. The Company and each
          Holder agree that monetary damages would not provide adequate compensation for
          any losses incurred by reason of a breach by it of any of the provisions of
this           Agreement and hereby further agrees that, in the event of any action for
          specific performance in respect of such breach, it shall waive the defense that
          a remedy at law would be adequate.  

10 

        (b)    No
Piggyback on Registrations. Except as and to the extent specified in
          Schedule 3.1(s) to the Purchase Agreement, neither the Company nor any of its
          security holders (other than the Holders in such capacity pursuant hereto) may
          include securities of the Company in a Registration Statement other than the
          Registrable Securities, and the Company shall not during the Registration
Period           enter into any agreement providing any such right to any of its security
          holders.  

        (c)    Compliance.
Each Holder covenants and agrees that it will comply with the           prospectus
delivery requirements of the Securities Act as applicable to it in           connection
with sales of Registrable Securities pursuant to the Registration           Statement.  

        (d)    Piggy-Back
Registrations. If at any time during the Effectiveness Period           there is not
an effective Registration Statement covering all of the Registrable           Securities
and the Company shall determine to prepare and file with the           Commission a
registration statement relating to an offering for its own account           or the
account of others under the Securities Act of any of its equity           securities,
other than on Form S-4 or Form S-8 (each as promulgated under the           Securities
Act) or their then equivalents relating to equity securities to be           issued
solely in connection with any acquisition of any entity or business or           equity
securities issuable in connection with stock option or other employee           benefit
plans, then the Company shall send to each Holder written notice of such
          determination and, if within fifteen days after receipt of such notice, any
such           Holder shall so request in writing, the Company shall include in such
          registration statement all or any part of such Registrable Securities such
          holder requests to be registered, subject to customary underwriter cutbacks
          applicable to all holders of registration rights.  

        (e)    Amendments
and Waivers. The provisions of this Agreement, including the           provisions of
this Section 8(e), may not be amended, modified or supplemented,           and waivers or
consents to departures from the provisions hereof may not be           given, unless the
same shall be in writing and signed by the Company and the           Holders of no less
than a majority in interest of the then outstanding           Registrable Securities.
Notwithstanding the foregoing, a waiver or consent to           depart from the
provisions hereof with respect to a matter that relates           exclusively to the
rights of certain Holders and that does not directly or           indirectly affect the
rights of other Holders may be given by Holders of at           least a majority of the
Registrable Securities to which such waiver or consent           relates.  

        (f)    Notices.
Any and all notices or other communications or deliveries           required or permitted
to be provided hereunder shall be in writing and shall be           deemed given and
effective on the earliest of (a) the date of transmission, if           such notice or
communication is delivered via facsimile (provided the sender           receives a
machine-generated confirmation of successful transmission) at the           facsimile
number specified in this Section prior to 6:30 p.m. (New York City           time) on a
Trading Day, (b) the next Trading Day after the date of transmission,           if such
notice or communication is delivered via facsimile at the facsimile           number
specified in this Section on a day that is not a Trading Day or later           than 6:30
p.m. (New York City time) on any Trading Day, (c) the Trading Day           following the
date of mailing, if sent by U.S. nationally recognized overnight           courier
service, or (d) upon actual receipt by the party to whom such notice is
          required to be given. The address for such notices and communications shall be
          as follows:  

11 

	If to the Company:	Alliance Pharmaceutical Corp.
		6175 Lusk Boulevard
		San Diego, CA 92121
		Attn: Chief Financial Officer
		Facsimile: (858) 410-5201
	
With a copy to:	Foley & Lardner LLP
		402 W. Broadway, 23rd Floor
		San Diego, CA 92101
		Attn: Kenneth D. Polin, Esq.
		Facsimile: (619) 234-3510
	
If to a Lender:	To the address set forth under such Lender's name on the signature pages
		hereto.
	
If to any other Person who is then the registered Holder:
	
 	To the address of such Holder as it appears in the stock transfer books of the
		Company

or such other address as may be
designated in writing hereafter, in the same manner, by such Person. 

        (g)    Successors
and Assigns. This Agreement shall inure to the benefit of and           be binding
upon the successors and permitted assigns of each of the parties and           shall
inure to the benefit of each Holder. Each Holder may assign their           respective
rights hereunder in the manner and to the Persons as permitted under           the
Purchase Agreement.  

        (h)    Execution
and Counterparts. This Agreement may be executed in any number           of
counterparts, each of which when so executed shall be deemed to be an           original
and, all of which taken together shall constitute one and the same           Agreement.
In the event that any signature is delivered by facsimile           transmission, such
signature shall create a valid binding obligation of the           party executing (or on
whose behalf such signature is executed) the same with           the same force and
effect as if such facsimile signature were the original           thereof.  

12 

        (i)    Governing
Law. All questions concerning the construction, validity,           enforcement and
interpretation of this Agreement shall be governed by and           construed and
enforced in accordance with the internal laws of the State of New           York, without
regard to the principles of conflicts of law thereof. Each party           agrees that
all Proceedings concerning the interpretations, enforcement and           defense of the
transactions contemplated by this Agreement (whether brought           against a party
hereto or its respective Affiliates, employees or agents) will           be commenced in
the New York Courts. Each party hereto hereby irrevocably           submits to the
exclusive jurisdiction of the New York Courts for the           adjudication of any
dispute hereunder or in connection herewith or with any           transaction
contemplated hereby or discussed herein, and hereby irrevocably           waives, and
agrees not to assert in any Proceeding, any claim that it is not           personally
subject to the jurisdiction of any New York Court, or that such           Proceeding has
been commenced in an improper or inconvenient forum. Each party           hereto hereby
irrevocably waives personal service of process and consents to           process being
served in any such Proceeding by mailing a copy thereof via           registered or
certified mail or overnight delivery (with evidence of delivery)           to such party
at the address in effect for notices to it under this Agreement           and agrees that
such service shall constitute good and sufficient service of           process and notice
thereof. Nothing contained herein shall be deemed to limit in           any way any right
to serve process in any manner permitted by law. Each party           hereto hereby
irrevocably waives, to the fullest extent permitted by applicable           law, any and
all right to trial by jury in any Proceeding arising out of or           relating to this
Agreement or the transactions contemplated hereby. If either           party shall
commence a Proceeding to enforce any provisions of this Agreement,           then the
prevailing party in such Proceeding shall be reimbursed by the other           party for
its attorney’s fees and other costs and expenses incurred with           the
investigation, preparation and prosecution of such Proceeding.  

        (j)    Cumulative
Remedies. The remedies provided herein are cumulative and not           exclusive of
any remedies provided by law.  

        (k)    Severability.
If any term, provision, covenant or restriction of this           Agreement is held by a
court of competent jurisdiction to be invalid, illegal,           void or unenforceable,
the remainder of the terms, provisions, covenants and           restrictions set forth
herein shall remain in full force and effect and shall in           no way be affected,
impaired or invalidated, and the parties hereto shall use           their reasonable
efforts to find and employ an alternative means to achieve the           same or
substantially the same result as that contemplated by such term,           provision,
covenant or restriction. It is hereby stipulated and declared to be           the
intention of the parties that they would have executed the remaining terms,
          provisions, covenants and restrictions without including any of such that may
be           hereafter declared invalid, illegal, void or unenforceable.  

        (l)    Headings.
The headings in this Agreement are for convenience of reference           only and shall
not limit or otherwise affect the meaning hereof.  

13 

        (m)    Independent
Nature of Lenders’ Obligations and Rights. The           obligations of each
Holder under this Agreement are several and not joint with           the obligations of
each other Holder, and no Holder shall be responsible in any           way for the
performance of the obligations of any other Holder under this           Agreement.
Nothing contained herein or in any Transaction Document, and no           action taken by
any Holder pursuant thereto, shall be deemed to constitute the           Holders as a
partnership, an association, a joint venture or any other kind of           entity, or
create a presumption that the Holders are in any way acting in           concert or as a
group with respect to such obligations or the transactions           contemplated by this
Agreement or any other Transaction Document. Each Holder           acknowledges that no
other Holder will be acting as agent of such Holder in           enforcing its rights
under this Agreement. Each Holder shall be entitled to           independently protect
and enforce its rights, including without limitation the           rights arising out of
this Agreement, and it shall not be necessary for any           other Holder to be joined
as an additional party in any Proceeding for such           purpose. The Company
acknowledges that each of the Holders has been provided           with the same
Registration Rights Agreement for the purpose of closing a           transaction with
multiple Holders and not because it was required or requested           to do so by any
Lender.  

[REMAINDER OF PAGE
INTENTIONALLY LEFT BLANK 
SIGNATURE PAGES TO FOLLOW]  

14 

        IN
WITNESS WHEREOF, the parties have executed this Registration Rights Agreement as of the
date first written above. 

		
		ALLIANCE PHARMACEUTICAL CORP.
	

 	By:_________________________________
		      Name:
		      Title:

[REMAINDER OF PAGE
INTENTIONALLY LEFT BLANK 
SIGNATURE PAGES OF LENDERS
TO FOLLOW] 

15 

        IN
WITNESS WHEREOF, the parties have executed this Registration Rights Agreement as of the
date first written above. 

		NAME OF INVESTING ENTITY
	

 	_______________________________________
	

 	AUTHORIZED SIGNATORY
	
 	By:_____________________________________
		      Name:
		      Title:
	

 	ADDRESS FOR NOTICE
	
 	c/o:______________________________________
	
 	Street:____________________________________
	
 	City/State/Zip:______________________________
	
 	Attention:_________________________________
	
 	Tel:______________________________________
	
 	Fax:______________________________________
	
 	Email:_____________________________________

16 

Annex A 

Plan of Distribution 

        The
selling stockholders, which as used herein includes donees, pledgees, transferees or other
successors-in-interest selling shares of common stock or interests in shares of common
stock received after the date of this prospectus from a selling stockholder as a gift,
pledge, partnership distribution or other transfer, may, from time to time, sell, transfer
or otherwise dispose of any or all of their shares of common stock or interests in shares
of common stock on any stock exchange, market or trading facility on which the shares are
traded or in private transactions. These dispositions may be at fixed prices, at
prevailing market prices at the time of sale, at prices related to the prevailing market
price, at varying prices determined at the time of sale, or at negotiated prices. 

        The
selling stockholders may use any one or more of the following methods when disposing of
shares or interests therein: 

        —
ordinary brokerage transactions and transactions in which the broker-dealer solicits
purchasers; 

        —
block trades in which the broker-dealer will attempt to sell the shares as agent, but may
position and resell a portion of the block as principal to facilitate the transaction; 

        —
purchases by a broker-dealer as principal and resale by the broker-dealer for its account; 

        — an
exchange distribution in accordance with the rules of the applicable exchange; 

      —
privately negotiated transactions;

        —
short sales effected after the date of this Prospectus; 

        —
through the writing or settlement of options or other hedging  transactions,  whether
through an options exchange or otherwise; 

        — broker-dealers
may agree with the selling stockholders to sell a specified number of such shares at a
stipulated price per share; 

        —
a combination of any such methods of sale; and 

        — any
other method permitted pursuant to applicable law. 

        The
selling stockholders may, from time to time, pledge or grant a security interest in some
or all of the shares of common stock owned by them and, if they default in the performance
of their secured obligations, the pledgees or secured parties may offer and sell the
shares of common stock, from time to time, under this prospectus, or under an amendment to
this prospectus under Rule 424(b)(3) or other applicable provision of the Securities Act
amending the list of selling stockholders to include the pledgee, transferee or other
successors in interest as selling stockholders under this prospectus. The selling
stockholders also may transfer the shares of common stock in other circumstances, in which
case the transferees, pledgees or other successors in interest will be the selling
beneficial owners for purposes of this prospectus. 

17 

        In
connection with the sale of our common stock or interests therein, the selling
stockholders may enter into hedging transactions with broker-dealers or other financial
institutions, which may in turn engage in short sales of the common stock in the course of
hedging the positions they assume. The selling stockholders may also sell shares of our
common stock short and deliver these securities to close out their short positions, or
loan or pledge the common stock to broker-dealers that in turn may sell these securities.
The selling stockholders may also enter into option or other transactions with
broker-dealers or other financial institutions or the creation of one or more derivative
securities which require the delivery to such broker-dealer or other financial institution
of shares offered by this prospectus, which shares such broker-dealer or other financial
institution may resell pursuant to this prospectus (as supplemented or amended to reflect
such transaction). 

        The
aggregate proceeds to the selling stockholders from the sale of the common stock offered
by them will be the purchase price of the common stock less discounts or commissions, if
any. Each of the selling stockholders reserves the right to accept and, together with
their agents from time to time, to reject, in whole or in part, any proposed purchase of
common stock to be made directly or through agents. We will not receive any of the
proceeds from this offering. Upon any exercise of the warrants by payment of cash,
however, we will receive the exercise price of the warrants. 

        The
selling stockholders also may resell all or a portion of the shares in open market
transactions in reliance upon Rule 144 under the Securities Act of 1933, provided that
they meet the criteria and conform to the requirements of that rule. 

        The
selling stockholders and any underwriters, broker-dealers or agents that participate in
the sale of the common stock or interests therein may be “underwriters” within
the meaning of Section 2(11) of the Securities Act. Any discounts, commissions,
concessions or profit they earn on any resale of the shares may be underwriting discounts
and commissions under the Securities Act. Discounts, concessions, commissions and similar
selling expenses, if any, that can be attributed to the sale of the Securities will be
paid by the Selling Stockholder and/or the purchasers. Each Selling Stockholder has
represented and warranted to the Company that it acquired the securities subject to this
registration statement in the ordinary course of such Selling Stockholder’s business
and, at the time of its purchase of such securities such Selling Stockholder had no
agreements or understandings, directly or indirectly, with any person to distribute any
such securities. The Company has advised each Selling Stockholder that it may not use
shares registered under this registration statement to cover short sales of Common Stock
made prior to the date on which this registration statement shall have been declared
effective by the Commission. Selling stockholders who are “underwriters” within
the meaning of Section 2(11) of the Securities Act will be subject to the prospectus
delivery requirements of the Securities Act. 

        To
the extent required, the shares of our common stock to be sold, the names of the selling
stockholders, the respective purchase prices and public offering prices, the names of any
agents, dealer or underwriter, any applicable commissions or discounts with respect to a
particular offer will be set forth in an accompanying prospectus supplement or, if
appropriate, a post-effective amendment to the registration statement that includes this
prospectus. 

18 

        In
order to comply with the securities laws of some states, if applicable, the common stock
may be sold in these jurisdictions only through registered or licensed brokers or dealers.
In addition, in some states the common stock may not be sold unless it has been registered
or qualified for sale or an exemption from registration or qualification requirements is
available and is complied with. 

        We
have advised the selling stockholders that the anti-manipulation rules of Regulation M
under the Exchange Act may apply to sales of shares in the market and to the activities of
the selling stockholders and their affiliates. In addition, we will make copies of this
prospectus (as it may be supplemented or amended from time to time) available to the
selling stockholders for the purpose of satisfying the prospectus delivery requirements of
the Securities Act. The selling stockholders may indemnify any broker-dealer that
participates in transactions involving the sale of the shares against certain liabilities,
including liabilities arising under the Securities Act. 

        We
have agreed to indemnify the selling stockholders against liabilities, including
liabilities under the Securities Act and state securities laws, relating to the
registration of the shares offered by this prospectus. 

        We
have agreed with the selling stockholders to keep the registration statement of which this
prospectus constitutes a part effective until the earlier of (1) such time as all of the
shares covered by this prospectus have been disposed of pursuant to and in accordance with
the registration statement or (2) the date on which the shares may be sold pursuant to
Rule 144(k) of the Securities Act. 

19 

Annex B 

ALLIANCE
PHARMACEUTICAL CORP. 

Selling Securityholder
Notice and Questionnaire 

The undersigned beneficial owner of
common stock (the “Common Stock”), of Alliance Pharmaceutical Corp. (the
“Company”) understands that the Company has filed or intends to file with
the Securities and Exchange Commission (the “Commission”) a Registration
Statement for the registration and resale of the Registrable Securities, in accordance
with the terms of the Registration Rights Agreement, dated as of September 21, 2004 (the
“Registration Rights Agreement”), among the Company and the Lenders named
therein. A copy of the Registration Rights Agreement is available from the Company upon
request at the address set forth below. All capitalized terms used and not otherwise
defined herein shall have the meanings ascribed thereto in the Registration Rights
Agreement. 

The undersigned hereby provides the
following information to the Company and represents and warrants that such information is
accurate: 

QUESTIONNAIRE 

	1.  	Name. 

	 	(a) 	Full
Legal Name of Selling Securityholder

	 	
_____________________________________________________________________________

	 	(b) 	Full
Legal Name of Registered Holder (if not the same as (a) above) through
               which Registrable Securities Listed in Item 3 below are held: 

	 	
_____________________________________________________________________________

	 	(c) 	Full
Legal Name of Natural Control Person (which means a natural person who
               directly you indirectly alone or with others has power to vote or dispose
of the                securities covered by the questionnaire): 

	 	
_____________________________________________________________________________

	2.  	Address
for Notices to Selling Securityholder: 

	 	
_____________________________________________________________________________ 

	 	
_____________________________________________________________________________ 

	 	
_____________________________________________________________________________ 

Telephone:______________________________________________________________  

20 

Fax:______________________________________________________________________________

Contact
Person:_____________________________________________________________________  

	3.  	Beneficial
Ownership of Registrable Securities: 

	 	(a)	Type
and Principal Amount of Registrable Securities beneficially owned: 

	 	
_____________________________________________________________________________  

	 	
_____________________________________________________________________________  

	 	
_____________________________________________________________________________  

	4.  	Broker-Dealer
Status: 

	 	(a)	Are
you a broker-dealer? 

		
	Yes |_|	No |_|

	 	         Note: 	If
yes, the Commission's staff has indicated that you should be identified as an underwriter
in                   the Registration Statement.

	 	(b)	                 Are
you an affiliate of a broker-dealer? 

		
	Yes |_|	No |_|

	 	(c) 	If
you are an affiliate of a broker-dealer, do you certify that you bought the
               Registrable Securities in the ordinary course of business, and at the time
of                the purchase of the Registrable Securities to be resold, you had no
agreements                or understandings, directly or indirectly, with any person to
distribute the                Registrable Securities? 

		
	Yes |_|	No |_|

	 	         Note: 	If
no, the Commission's staff has indicated that you should be identified as an underwriter
in                   the Registration Statement.

	5. 	Beneficial
Ownership of Other Securities of the Company Owned by the Selling
          Securityholder.

	 	
Except
as set forth below in this Item 5, the undersigned is not the beneficial or registered
owner of  any securities of the Company other than the Registrable Securities
listed above in Item 3. 

	 	(a)	Type
and Amount of Other Securities beneficially owned by the Selling
          Securityholder: 

	 	
_____________________________________________________________________________  

	 	
_____________________________________________________________________________  

	 	
_____________________________________________________________________________  

21 

	6.  	Relationships
with the Company: 

	 	
Except
as set forth below, neither the undersigned nor any of its affiliates, officers, directors
or  principal equity holders (owners of 5% of more of the equity securities of the
undersigned) has held any  position or office or has had any other material
relationship with the Company (or its predecessors or  affiliates) during the past
three years. 

	 	
State
any exceptions here:  

	 	
_____________________________________________________________________________  

	 	
_____________________________________________________________________________  

The undersigned agrees to promptly
notify the Company of any inaccuracies or changes in the information provided herein that
may occur subsequent to the date hereof and prior to the Effective Date for the
Registration Statement. 

By signing below, the undersigned
consents to the disclosure of the information contained herein in its answers to Items 1
through 6 and the inclusion of such information in the Registration Statement and the
related prospectus. The undersigned understands that such information will be relied upon
by the Company in connection with the preparation or amendment of the Registration
Statement and the related prospectus. 

IN WITNESS WHEREOF the undersigned,
by authority duly given, has caused this Notice and Questionnaire to be executed and
delivered either in person or by its duly authorized agent. 

		
	Dated:_________________________	Beneficial Owner:___________________________________
	

 	By:______________________________________________
		      Name:
		      Title:

PLEASE FAX A COPY OF THE COMPLETED
AND EXECUTED NOTICE AND QUESTIONNAIRE, AND RETURN THE ORIGINAL BY OVERNIGHT MAIL, TO: 

	 	
Foley
& Lardner LLP                                     
402 W. Broadway, 23rd Floor
                                    
San Diego, CA 92101
                                    
Attn: Jodie Goldade
                                    
Facsimile: (619) 234-6655

22EXHIBIT 4(b)(15)

UNLESS AND UNTIL IT IS EXCHANGED IN WHOLE OR IN PART FOR NOTES IN CERTIFICATED
FORM, THIS NOTE MAY NOT BE TRANSFERRED EXCEPT AS A WHOLE BY THE DEPOSITARY TO A
NOMINEE OF THE DEPOSITARY OR BY A NOMINEE OF THE DEPOSITARY TO THE DEPOSITARY OR
ANOTHER NOMINEE OF THE DEPOSITARY OR BY THE DEPOSITARY OR ANY SUCH NOMINEE TO A
SUCCESSOR DEPOSITARY OR A NOMINEE OF SUCH SUCCESSOR DEPOSITARY. UNLESS THIS
CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST
COMPANY (55 WATER STREET, NEW YORK, NEW YORK), TO THE ISSUER OR ITS AGENT FOR
REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE ISSUED IS
REGISTERED IN THE NAME OF CEDE & CO. OR SUCH OTHER NAME AS REQUESTED BY AN
AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY AND ANY PAYMENT IS
MADE TO CEDE & CO., ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL, SINCE THE REGISTERED OWNER HEREOF,
CEDE & CO., HAS AN INTEREST HEREIN.

REGISTERED                                                  $ [  ]

No. FL-01                                                   CUSIP #[ ]

                         THE BEAR STEARNS COMPANIES INC.

                           MEDIUM-TERM NOTE, SERIES B

                   ACCELERATED MARKET PARTICIPATION SECURITIES

                         LINKED TO THE NASDAQ-100 INDEX

                              DUE DECEMBER 30, 2005

Interest Rate: *

Original Issue Date:  September 30, 2004       Redeemable On and After:  N/A

Maturity Date:        December 30, 3005        Optional Repayment Date(s): N/A

Minimum
Denominations:        $1,000, increased in multiples of $1,000

* The Company will not make any periodic payments of interest or any other
payments on the Notes until Maturity. At Maturity, the Company will pay the Cash
Settlement Value (as defined below).

<PAGE>

            THE BEAR STEARNS COMPANIES INC., a Delaware corporation (the
"Company"), for value received, hereby promises to pay to CEDE & CO., or
registered assigns, the Cash Settlement Value, on the maturity date shown above.

            Payment of the Cash Settlement Value shall be made at the office or
agency of the Trustee (as defined below) maintained for that purpose in the
Borough of Manhattan, The City of New York, in such coin or currency of the
United States of America as at the time of payment is legal tender for the
payment of public and private debt.

            The Cash Settlement Value due at Maturity will be paid at Maturity
in immediately available funds against presentation of this Note at the office
or agency of the Trustee maintained for that purpose in the Borough of
Manhattan, The City of New York.

            REFERENCE IS HEREBY MADE TO THE FURTHER PROVISIONS OF THIS NOTE SET
FORTH ON THE REVERSE HEREOF, WHICH FURTHER PROVISIONS SHALL FOR ALL PURPOSES
HAVE THE SAME EFFECT AS IF SET FORTH ON THE FACE HEREOF.

            This Note shall be governed by and construed in accordance with the
laws of the State of New York.

            This Note is one of the series of Medium-Term Notes, Series B, of
the Company.

            Unless the certificate of authentication hereon has been executed by
JPMorgan Chase Bank (formerly, The Chase Manhattan Bank), the Trustee under the
Indenture, or its successor thereunder by the manual signature of one of its
authorized signatories, this Note shall not be entitled to any benefit under the
Indenture or be valid or obligatory for any purpose.

                                      -2-
<PAGE>

            IN WITNESS WHEREOF, the Company has caused this instrument to be
duly executed under its corporate seal.

Dated:

                                       THE BEAR STEARNS COMPANIES INC.

                                       By:
                                          --------------------------------------
                                            Executive Vice President and
                                            Chief Financial Officer

ATTEST:

-------------------------
Secretary

[Corporate Seal]

                          CERTIFICATE OF AUTHENTICATION

            This is one of the Securities of the series designated therein
referred to in the within-mentioned Indenture.

                                       JPMORGAN CHASE BANK, as Trustee

                                       By:
                                          -----------------------------
                                          Authorized Signature

                                      -3-
<PAGE>

                                [Reverse of Note]

                         THE BEAR STEARNS COMPANIES INC.

                           MEDIUM-TERM NOTE, SERIES B

                   ACCELERATED MARKET PARTICIPATION SECURITIES

                         LINKED TO THE NASDAQ-100 INDEX

                              DUE DECEMBER 30, 2005

            This Note is one of a duly authorized issue of debentures, notes or
other evidences of indebtedness (hereinafter called the "Securities") of the
Company of the series hereinafter specified, all such Securities issued and to
be issued under the Indenture dated as of May 31, 1991, as amended (herein
called the "Indenture") between the Company and JPMorgan Chase Bank (formerly,
The Chase Manhattan Bank), as trustee (herein called the "Trustee," which term
includes any successor trustee under the Indenture), to which Indenture and all
indentures supplemental thereto reference is hereby made for a statement of the
respective rights and limitations of rights thereunder of the Company, the
Trustee and the Holders of the Securities, and the terms upon which the
Securities are, and are to be, authenticated and delivered. As provided in the
Indenture, Securities may be issued in one or more series, which different
series may be issued in various aggregate principal amounts, may mature at
different times, may bear interest, if any, at different rates, may be subject
to different redemption provisions, if any, may be subject to different
repayment provisions, if any, may be subject to different sinking, purchase or
analogous funds, if any, may be subject to different covenants and Events of
Default and may otherwise vary as in the Indenture provided or permitted. This
Note is one of the series of the Securities designated as Medium-Term Notes,
Series B (the "Notes"). The Notes of this series may be issued at various times
with different maturity dates, redemption dates and different principal
repayment provisions, may bear interest at different rates and may otherwise
vary, all as provided in the Indenture.

Certain Definitions

Nasdaq-100 Index:............ means the Nasdaq-100 Index (ticker "NDX"), as
                              published by The Nasdaq Stock Market, Inc.
                              ("Nasdaq").

Calculation Agent:........... means Bear, Stearns & Co. Inc.

Index Business Day:.......... means a day, as determined by the Calculation
                              Agent, on which The Nasdaq Stock Market, the New
                              York Stock Exchange (the "NYSE") and the American
                              Stock Exchange (the "AMEX "), are open for trading
                              and the Nasdaq-100 Index or any successor index
                              (as defined below) is calculated and published.

                                      -4-
<PAGE>

Initial Index Level:......... means, the closing index level of the Nasdaq-100
                              Index on September 27, 2004.

Final Index Level:........... will be determined by the Calculation Agent and
                              means the closing index level of the Nasdaq-100
                              Index on December 27, 2005, the calculation date,
                              or if that day is not an Index Business Day, on
                              the next Index Business Day.

Cash Settlement Value

            On the maturity date, the Cash Settlement Value of this Note shall
be paid. The Cash Settlement Value shall be linked to the performance of the
Nasdaq-100 Index.

            The Cash Settlement Value depends entirely on the relation of the
Final Index Level to the Initial Index Level and shall be calculated as follows:

            (i) If the Final Index Level is greater than or equal to the Initial
            Index Level, the Cash Settlement Value per each $1,000 aggregate
            principal amount of Notes will equal:
            --------------------------------------------------------------------

            --------------------------------------------------------------------

            $1,000+ (  ($1,000)(2)x(  Final Index Level -- Initial Index Level
                                      ----------------------------------------
                                                   Initial Index Level        ))

            --------------------------------------------------------------------

            --------------------------------------------------------------------

            provided, however, the Cash Settlement Value cannot exceed $1,200
            per each $1,000 aggregate principal amount of Notes;

            (ii) If the Final Index Level is less than the Initial Index Level,
            the Cash Settlement Value per Note will equal:

            --------------------------------------------------------------------

            --------------------------------------------------------------------

                                        $1,000 x ( Final Index Level
                                                  -------------------
                                                  Initial Index Level )

            --------------------------------------------------------------------

            --------------------------------------------------------------------

Discontinuance of the Nasdaq-100 Index

            If Nasdaq discontinues publication of the Nasdaq-100 Index and
Nasdaq or another entity publishes a successor or substitute index that the
Calculation Agent determines, in

                                      -5-
<PAGE>

its sole discretion, to be comparable to the discontinued Nasdaq-100 Index (the
new index being referred to as a "successor index"), then the relevant closing
levels will be determined by reference to the successor index at the close of
trading on the NYSE, the AMEX, The Nasdaq Stock Market, or the relevant exchange
or market for the successor index.

            Upon any selection by the Calculation Agent of a successor index,
the Calculation Agent will cause notice to be furnished to the Company and the
Trustee, who will provide notice of the selection of the successor index to the
registered Holders of the Notes.

            If Nasdaq discontinues publication of the Nasdaq-100 Index, and the
Calculation Agent determines that no successor index is available, then the
Calculation Agent will notify the Company and the Trustee, and will calculate
the appropriate closing levels. These calculations by the Calculation Agent will
be in accordance with the formula for and method of calculating the Nasdaq-100
Index last in effect prior to that discontinuance.

            If a successor index is selected or the Calculation Agent calculates
a value as a substitute for the Nasdaq-100 Index as described above, that
successor index or value will be substituted for the Nasdaq-100 Index for all
purposes, including for purposes of determining whether an Index Business Day or
Market Disruption Event (as defined below) has occurred.

Adjustments to the Nasdaq-100 Index

            If, at any time, the method of calculating the Nasdaq-100 Index or a
successor index is changed in any material respect, or if the Nasdaq-100 Index
or a successor index is in any other way modified, so that the value of the
Nasdaq-100 Index or the successor index does not, in the opinion of the
Calculation Agent, fairly represent the value of that index, had the changes or
modifications not been made, then, from and after that time, the Calculation
Agent will, at the close of business in New York, New York, make those
adjustments as, in the good faith judgment of the Calculation Agent, may be
necessary in order to arrive at a calculation of a value of a stock index
comparable to the Nasdaq-100 Index or the successor index, as if the changes or
modifications had not been made, and calculate the closing value with reference
to the Nasdaq-100 Index or the successor index. Accordingly, if the method of
calculating the Nasdaq-100 Index or the successor index is modified so that the
value of the Nasdaq-100 Index or the successor index is a fraction or a multiple
of what it would have been if it had not been modified (for example, due to a
split in the Nasdaq-100 Index), then the Calculation Agent will adjust that
index in order to arrive at a value of the index as if it had not been modified
(for example, as if the split had not occurred).

Market Disruption Events

            If there is a market disruption event (a "Market Disruption Event")
on the calculation date, the calculation date will be the first succeeding Index
Business Day on which there is no Market Disruption Event, unless there is a
Market Disruption Event on each of the two Index Business Days following the
original date that, but for the Market Disruption Event, would have been the
calculation date. In that case, the second Index Business Day will be deemed to
be the calculation date, notwithstanding the Market Disruption Event and the
Calculation Agent will determine the level of the Nasdaq-100 Index on that
second Index Business Day in accordance with the formula for and method of
calculating the Nasdaq-100 Index in effect prior to the Market Disruption Event
using the exchange traded price of each

                                      -6-
<PAGE>

security in the Nasdaq-100 Index (or, if trading in any such security has been
suspended or materially limited, the Calculation Agent's good faith estimate of
the exchange traded price that would have prevailed but for such suspension or
limitation) as of that second Index Business Day.

            A Market Disruption Event means either of the following events, as
determined by the Calculation Agent, in its sole discretion:

    o   the suspension of or material limitation on trading for more than two
        hours of trading, or during the one-half hour period preceding the close
        of trading on the applicable exchange in 20% or more of the stocks which
        then comprise the Nasdaq-100 Index, or any successor index (without
        taking into account any extended or after-hours trading session); or

    o   the suspension of or material limitation on trading, in each case, for
        more than two hours of trading, or during the one-half hour period
        preceding the close of trading, on the applicable exchange, whether by
        reason of movements in price otherwise exceeding levels permitted by the
        relevant exchange or otherwise, in option contracts or futures contracts
        related to the Nasdaq-100 Index, or any successor index, which are
        traded on any major US exchange.

            For the purpose of the above definition:

    a)  a limitation on the hours in a trading day and/or number of days of
        trading will not constitute a Market Disruption Event if it results from
        an announced change in the regular business hours of the relevant
        exchange, and

    b)  for the purpose of clause (a) above, any limitations on trading during
        significant market fluctuations under NYSE Rule 80A, or any applicable
        rule or regulation enacted or promulgated by the NYSE or any other self
        regulatory organization or the Securities and Exchange Commission of
        similar scope as determined by the Calculation Agent, will be considered
        "material."

Redemption; Defeasance

            The Notes are not subject to redemption before Maturity, and are not
subject to defeasance.

Events of Default and Acceleration

            If an Event of Default with respect to any Notes has occurred and is
continuing, then the amount payable to the beneficial owner of a Note, upon any
acceleration permitted by the Notes will be equal to the Cash Settlement Value
as though the date of early repayment were the maturity date of the Notes,
adjusted by an amount equal to any losses, expenses and costs to the Company
unwinding any underlying hedging or funding arrangements, all as determined by
the Calculation Agent in its sole and absolute discretion.

                                      -7-
<PAGE>

Same-Day Settlement and Payment

            Settlement for the Notes will be made by the Company in immediately
available funds. Payment of the Cash Settlement Value will be made in
immediately available funds, so long as the Notes are maintained in book-entry
form.

Calculation Agent

            All determinations made by the Calculation Agent will be at the sole
discretion of the Calculation Agent and will, in the absence of manifest error,
be conclusive for all purposes and binding on the Company and Holders of the
Notes.

General

            If so specified on the face of this Note, this Note may be redeemed
by the Company on and after the date so indicated on the face hereof. If no such
date is set forth on the face hereof, this Note may not be redeemed prior to
Maturity. On and after such date, if any, from which this Note may be redeemed,
this Note may be redeemed in whole or in part in increments of $1,000, at the
option of the Company, at a redemption price equal to 100% of the principal
amount to be redeemed, together with interest thereon payable to the Redemption
Date, on notice given, unless otherwise specified on the face hereof, not more
than 60 nor less than 30 days prior to the Redemption Date. If less than all the
Outstanding Notes having such terms as specified by the Company are to be
redeemed, the particular Notes to be redeemed shall be selected by the Trustee
not more than 60 days prior to the Redemption Date from the Outstanding Notes
having such terms as specified by the Company not previously called for
redemption, by such method as the Trustee shall deem fair and appropriate. The
notice of such redemption shall specify which Notes are to be redeemed. In the
event of redemption of this Note, in part only, a new Note or Notes in
authorized denominations for the unredeemed portion hereof shall be issued in
the name of the Holder hereof upon the surrender hereof.

            If so specified on the face of this Note, this Note will be subject
to repayment at the option of the Holder hereof on the Optional Repayment
Date(s). If no Optional Repayment Date is set forth on the face hereof, this
Note may not be repaid at the option of the Holder prior to Maturity. On and
after the Optional Repayment Date, if any, from which this Note may be repaid at
the option of the Holder, this Note shall be repayable in whole or in part in
increments of $1,000 at a repayment price equal to 100% of the principal amount
to be repaid, together with interest thereon payable to the Optional Repayment
Date. For this Note to be repaid in whole or in part at the option of the Holder
hereof, the Trustee must receive not less than 30 nor more than 60 days prior to
the Optional Repayment Date (i) this Note with the form entitled "Option to
Elect Repayment," which appears below, duly completed or (ii) a telegram, telex,
facsimile transmission or a letter from a member of a national securities
exchange or the National Association of Securities Dealers, Inc. or a commercial
bank or trust company in the United States of America setting forth the name of
the Holder of this Note, the principal amount of this Note, the certificate
number of this Note or a description of this Note's tenor or terms, the
principal amount of this Note to be repaid, a statement that the option to elect
repayment is being exercised thereby and a guarantee that this Note with the
form entitled "Option to Elect Repayment," which appears below, duly completed,
will be received by the Trustee no later than five Business Days after the date
of such telegram, telex, facsimile transmission or letter and this

                                      -8-
<PAGE>

Note and such form duly completed are received by the Trustee by such fifth
Business Day. Exercise of the repayment option shall be irrevocable.

            If any Event of Default with respect to the Notes shall occur and be
continuing, the Trustee or the Holders of not less than 25% in principal amount
of the Outstanding Notes may declare the principal of all the Notes due and
payable in the manner and with the effect provided in the Indenture.

            The Indenture permits, with certain exceptions as therein provided,
the amendment thereof and the modification of the rights and obligations of the
Company and the rights of the Holders of the Securities of each series to be
affected under the Indenture at any time by the Company and the Trustee with the
consent of the Holders of 66-2/3% in aggregate principal amount of the
Securities at the time Outstanding of each series affected thereby. The
Indenture also contains provisions permitting the Holders of specified
percentages in aggregate principal amount of the Securities of each series at
the time Outstanding, on behalf of the Holders of all Securities of each series,
to waive compliance by the Company with certain provisions of the Indenture and
certain past defaults under the Indenture and their consequences. Any such
consent or waiver by the Holder of this Note shall be conclusive and binding
upon such Holder and upon future Holders of this Note and of any Note issued
upon the registration of transfer hereof or in exchange hereof or in lieu hereof
whether or not notation of such consent or waiver is made upon this Note.

            Holders of Securities may not enforce their rights pursuant to the
Indenture or the Securities except as provided in the Indenture. No reference
herein to the Indenture and no provision of this Note or the Indenture shall
alter or impair the obligation of the Company, which is absolute and
unconditional, to pay the Cash Settlement Value with respect to this Note at the
time, place, and rate, and in the coin or currency, herein prescribed.

            As provided in the Indenture and subject to certain limitations
therein set forth, the transfer of this Note may be registered on the Security
Register of the Company, upon surrender of this Note for registration of
transfer at the office or agency of the Company in the Borough of Manhattan, The
City of New York, duly endorsed by, or accompanied by a written instrument of
transfer in form satisfactory to the Company, and this Note duly executed by,
the Holder hereof or by his attorney duly authorized in writing and thereupon
one or more new Notes, of authorized denominations and for the same aggregate
principal amount, will be issued to the designated transferee or transferees.

            The Notes are issuable only in registered form without coupons in
denominations of $1,000 or any amount in excess thereof which is an integral
multiple of $1,000. As provided in the Indenture and subject to certain
limitations therein set forth, this Note is exchangeable for a like aggregate
principal amount of Notes of different authorized denomination as requested by
the Holder surrendering the same.

            No service charge will be made for any such registration of transfer
or exchange, but the Company may require payment of a sum sufficient to cover
any tax or other governmental charge payable in connection therewith.

                                      -9-
<PAGE>

            Prior to the due presentment of this Note for registration of
transfer, the Company, the Trustee and any agent of the Company or the Trustee
may treat the Person in whose name this Note is registered as the owner hereof
for all purposes, whether or not this Note be overdue, and neither the Company,
the Trustee nor any such agent shall be affected by notice of the contrary.

            The Cash Settlement Value payable with respect to this Note shall in
no event be higher than the maximum rate, if any, permitted by applicable law.

            All capitalized terms used in this Note and not otherwise defined
herein shall have the meanings assigned to them in the Indenture.

                                      -10-
<PAGE>

                      ____________________________________

                                  ABBREVIATIONS

The following abbreviations, when used in the inscription on the face of this
instrument, shall be construed as though they were written out in full according
to applicable laws or regulations:

TEN COM          -            as tenants in common

TEN ENT          -            as tenants by the entireties

JT TEN           -            as joint tenants with right of survivorship and
                              not as tenants in common

UNIF GIFT MIN ACT -           ___________________ Custodian ___________________
                                     (Cust)                       (Minor)

                                      Under Uniform Gifts to Minors Act

                              _________________________________________________
                                                   (State)

Additional abbreviations may also be used though not in the above list.

                      ____________________________________

                            OPTION TO ELECT REPAYMENT

            The undersigned hereby irrevocably request(s) and instruct(s) the
Company to repay this Note (or portion thereof specified below) pursuant to its
terms on ____________, 20___ (the "Optional Repayment Date") at a price equal to
the principal amount thereof, together with interest to the Optional Repayment
Date, to the undersigned at

________________________________________________________________________________

________________________________________________________________________________
        (Please print or typewrite name and address of the undersigned.)

            For this Note to be repaid the Trustee must receive at 4 New York
Plaza, New York, New York 10004, Attention: Debt Operations - 13th Floor, or at
such other place or places of which the Company shall from time to time notify
the Holder of this Note, not more than 60 days nor less than 30 days prior to
the Optional Repayment Date, this Note with this "Option to Elect Repayment"
form duly completed.

                                      -11-
<PAGE>

            If less than the entire principal amount of this Note is to be
repaid, specify the portion thereof (which shall be increments of $1,000) which
the Holder elects to have repaid: $_________________; and specify the
denomination or denominations (which, unless a different minimum denomination is
set forth on the face hereof, shall be $25,000 or an integral multiple of $1,000
in excess of $25,000) of the Notes to be issued to the Holder for the portion of
this Note not being repaid (in the absence of any such specification, one such
Note will be issued for the portion not being repaid): $________________.

Date:_________________                       ___________________________________
                                             Note: The signature to this Option
                                             to Elect Repayment must correspond
                                             with the same as written upon the
                                             face of this Note in every
                                             particular without alteration or
                                             enlargement.

                      ____________________________________

                                   ASSIGNMENT

                       FOR VALUE RECEIVED, the undersigned
                 hereby sell(s), assign(s) and transfer(s) unto

________________________________________________________________________________
PLEASE INSERT SOCIAL SECURITY OR OTHER IDENTIFYING NUMBER OF ASSIGNEE

________________________________________________________________________________

________________________________________________________________________________

________________________________________________________________________________
PLEASE PRINT OR TYPEWRITE NAME AND ADDRESS INCLUDING POSTAL ZIP CODE OF ASSIGNEE
________________________________________________________________________________
the within Note and all rights thereunder, hereby irrevocably constituting and
appointing _____________________________________________________________________

________________________________________________________________________________

_______________________________________________________________________ Attorney
to transfer said Note on the books of the Company, with full power of
substitution in the premises.

Dated:_______________________               ____________________________________

____________________________________
        (Signature Guarantee)

                                      -12-

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