Document:

Unassociated Document

    
      CONFIDENTIAL
        TREATMENT REQUESTED: Certain portions of this document have been omitted
        pursuant to a request for confidential treatment and, where applicable, have
        been marked with an asterisk (“[****]”)
        to
        denote where omissions have been made. Note that eight pages of this exhibit
        contain omitted material pursuant to this request. The confidential material
        has
        been filed separately with the Securities and Exchange
        Commission.

    

    
       

      EXCLUSIVE
        DISTRIBUTION AGREEMENT

       

      This
        Exclusive Distribution Agreement (“Agreement”) is made as of April 1, 2002 (the
“Effective Date”), between Alliance Pharmaceutical Corp., a New York
        corporation, having its principal place of business at 3040 Science Park
        Road,
        San Diego, California 92121 (“Client”), and CORD Logistics, Inc., an Ohio
        corporation, having its principal place of business at 15 Ingram Boulevard,
        LaVergne, Tennessee 37086 (“CORD”).

       

      A.   Client
        is, among other things, in the business of developing and marketing
        pharmaceutical products in the United States, the District of Columbia and
        Puerto Rico (the “Territory”).

       

      B.   CORD
        is,
        among other things, in the business of distributing pharmaceutical products
        to
        wholesalers, specialty distributors, physicians, clinics, hospitals, pharmacies,
        and other health care providers in the Territory, and of providing Information
        Systems and other services that support its customers’ use of its distribution
        capabilities.

       

      C.   Client
        desires to engage CORD as its exclusive distribution agent for commercial
        sales
        of lmagentTM in all formulations (collectively, the “Product”), and such other
        pharmaceutical products agreed to by the parties in the Territory and to
        perform
        certain other services described in this Agreement, all upon the terms and
        conditions set forth in this Agreement.

       

      THEREFORE,
        in consideration of the mutual conditions and covenants set forth herein,
        CORD
        and Client (collectively referred to as “Party” or “Parties”) agree as
        follows:

       

      1.   Appointment/Authorization.

       

      1.1   Upon
        the
        terms and conditions set forth in this Agreement, Client appoints CORD as
        its
        exclusive distribution agent of Product in the Territory to Client’s customers,
        including, but not limited to, wholesalers, specialty distributors, physicians,
        clinics, hospitals, pharmacies and other health care providers in the Territory
        (collectively, “Customers”).

       

      1.2   Subject
        to the terms and conditions set forth in this Agreement, CORD accepts the
        appointment to represent Client as its authorized exclusive distribution
        agent
        of Product to Customers in the Territory.

       

      1.3   Client
        shall provide CORD with a right of first negotiation with respect to the
        distribution of new imaging agents or other pharmaceutical products acquired
        or
        promoted by Client in the Territory after the Effective Date. Client shall
        grant
        CORD an exclusive right of negotiation with respect to the distribution of
        such
        new product for a period of sixty (60) days after Client’s notice to CORD that
        such new product will be available for distribution. If the parties have
        not
        reached an agreement with respect to the distribution of the new product
        within
        sixty (60) days from the date of Client’s
        notice,
        and entered into a definitive agreement within sixty (60) days thereafter,
        or if
        Cord notifies Client in writing at any point during such negotiation period
        that
        it is not interested or unable to distribute such new product(s), then Client
        shall have no further obligation with respect to that new product under this
        Section 1.3.

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
            [****]
              Represents material which has been redacted pursuant to a request for
              confidential treatment pursuant to Rule 24B-2 under the Securities
              Exchange Act
              of 1934, as amended. The confidential materials have been filed separately
              with
              the SEC.

          

        

      

       

      2.   Services.

       

      2.1   CORD
        shall provide the services set forth in the Operating Guidelines, which include,
        without limitation, storage, distribution, returns, customer support, financial
        support, EDI and system access support (“Services”). A copy of the Operating
        Guidelines is attached hereto as Exhibit A and incorporated by
        reference.

       

      2.2   The
        Operating Guidelines may be amended from time to time upon the mutual written
        agreement of the Parties; provided, however, that any change, modification
        or
        amendment to the Operating Guidelines may result in an increase in the fees
        charged by CORD in Section 5.

       

      2.3   CORD’s
        services shall comply with the Operating Guidelines, provided Client’s shipment
        of Products to CORD are within [****]
        of its
        Forecast (as hereinafter defined).

       

      2.4   All
        Product Returns shall be processed and handled by CORD in accordance with
        the
        Operating Guidelines; and, any customization or additional return services
        requested by Client shall be performed at an additional fee as agreed by
        the
        Parties.

       

      2.5   Client
        is
        solely responsible for all Product recalls. In the event Product is subject
        to
        recall, or Client, on its own initiative, recalls any Product, CORD shall
        provide assistance to Client as set forth in the Operating Guidelines, provided
        that Client shall pay to CORD an amount equal to CORD’s actual costs incurred
        with any, such recall services. Such cost shall be in addition to the Service
        Fees described in Section 5 below.

       

      3.   Product
        Supply/Client Responsibilities.

       

      3.1   Client
        shall deliver Product to CORD at CORD’s facility located at 15 Ingram Boulevard,
        Suite 100, La Vergne, TN 37086, or to such other distribution facility as
        may be
        designated by CORD to Client in writing (“Facility”).

       

      3.2   Client
        shall be responsible for delivery of Product to the Facility, including all
        costs, expenses and risk of loss associated with such delivery. Title to
        Product
        shall remain with Client at all times, even when Product is stored or warehoused
        at the Facility. Client shall at all times insure the Product for damage,
        loss,
        destruction, theft or any such other property damage (“Loss”) as further set
        forth in Section 17 below. Except for Loss resulting solely from the gross
        negligence or willful misconduct of CORD, Client shall bear all risk of loss
        or
        damage with respect to the Product stored or warehoused at the
        Facility.

       

      3.3   Client
        shall provide CORD with a forecast of the volume of Product to be handled
        by
        CORD under this Agreement, not less often than [****]
        (“Forecast”). Upon execution of this Agreement, Client shall deliver to CORD a
        customer list, which sets forth the Product prices (the “Customer Price List”).
        Client shall notify CORD of any change in the Customer Price List not less
        than
[****]
        prior to
        the effective date of any such change. CORD shall use commercially reasonably
        efforts to implement such price change in accordance with Client’s
        instruction.

       

      3.4   CORD
        shall visually inspect each shipment of Product for external damage or loss
        in
        transit and notify Client of any such damage or loss within a commercially
        reasonable period of time following discovery.

       

      
        
          
          

        

        
          2

          
            

          

        

        
          
            [****]
              Represents material which has been redacted pursuant to a request for
              confidential treatment pursuant to Rule 24B-2 under the Securities
              Exchange Act
              of 1934, as amended. The confidential materials have been filed separately
              with
              the SEC.

          

        

      

       

      4.   Information
        System Access.

       

      4.1   CORD
        shall provide Client access to an Operating System Base, which consists of
        the
        software used by CORD to support the services provided to Client, including
        the
        server and other components needed to execute the software and certain support
        services associated therewith, as further set forth in the Operating Guidelines
        (collectively, the “System”), upon the terms and conditions set forth in the
        System Access Agreement. A copy of the System Access Agreement is attached
        as
        Exhibit C and incorporated herein by reference. The software releases are
        (1)
        EliteSeries 6.1.2, as modified by CORD, supplied by Tecsys, Inc., a Montreal,
        Quebec, Canadian company, and any upgrades, maintenance releases or
        modifications implemented by CORD to support distribution services provided
        by
        CORD; (2)
        BACCS
        3.0 as modified by CORD and any upgrades implemented by CORD to support
        financial services provided by CORD; and (3)
        Impromptu 6.0, supplied by Cognos Inc., a Canadian company, and any upgrades,
        maintenance releases or modifications implemented by CORD to support reporting
        services provided by CORD.

       

      4.2   The
        System shall be made available to Client at the fees set forth in the Fee
        Schedule, except that any custom enhancements requested by Client shall be
        billed separately based on an hourly rate set forth in the Fee Schedule (as
        defined in Section 5).

       

      4.3   In
        addition to the terms set forth in the System Access Agreement, Client shall
        maintain (4)
        a local
        area network sufficient to support Client’s terminals and personal computers
        that have access to the System, all such personal computers shall meet the
        minimum specifications necessary to support software needed to access the
        system; (5)
        a
        centralized server sufficient for data storage, if data export requirements
        exist; and (6)
        a
        connection to the internet sufficient to support system access. Client shall
        also assign knowledgeable and qualified employees or representatives to
        facilitate access to the System.

       

      5.   Fees.

       

      5.1   As
        compensation for the Services, Client shall pay to CORD the fees (the “Fees”)
        set forth on Exhibit B (the “Fee Schedule”).

       

      5.2   CORD
        shall issue an invoice to Client for the Services rendered under this Agreement
        or for any other amounts due on a [****]
        basis.
        Payment is due within [****]
        days of
        the invoice date. If the Invoice is not paid within such [****]
        day
        period, a service charge on the unpaid amount calculated at the rate of
[****]
        per
        month (or the maximum rate permitted by law if such rate is less than
[****]
        per
        month) shall be imposed until such amount is paid in full.

       

      5.3   The
        Fees
        shall be held firm for the [****].
        Thereafter, CORD shall adjust the price not more often than once per contract
        year by the increase in the Producer Price Index - All Commodities published
        by
        the United States Department of Labor, Bureau of Statistics, as amended from
        time to time. In the case of a decrease in the Producer Price Index — All
        Commodities referenced above, Client’s pricing shall remain unchanged from the
        immediately preceding contract year. For purposes of sub-Section (i), the
        base
        point shall be the index level on the first day of the contract
        year.

       

      5.4   Notwithstanding
        the terms set forth above in Section 5.3, if CORD can reasonably demonstrate
        that the costs for providing the Services have materially increased, or are
        likely to materially increase in the coming year due to the adoption of any
        applicable law or regulation (or any material change in the interpretation
        or
        administration thereof), or due to unforeseen circumstances beyond CORD’s
        reasonable control, then upon notice from CORD, the Parties agree to meet
        in
        good faith and negotiate a mutually acceptable adjustment to the
        Fees.

       

      
        
          
          

        

        
          3

          
            

          

        

        
          
            [****]
              Represents material which has been redacted pursuant to a request for
              confidential treatment pursuant to Rule 24B-2 under the Securities
              Exchange Act
              of 1934, as amended. The confidential materials have been filed separately
              with
              the SEC.

          

        

      

       

      6.   Term
        and Termination.

       

      6.1   The
        initial term of this Agreement shall begin on the Effective Date and shall
        continue for a period of [****] years
        (the “Initial Term”), unless terminated earlier pursuant to this Agreement.
        Thereafter, this Agreement shall automatically renew for additional terms
        of
[****]
        each,
        unless written notice of termination is given by either Party at least ninety
        (90) days prior to the end of the Initial Term, or such other term, in which
        case this Agreement shall terminate at the end of the then current
        term.

       

      6.2   Either
        Party shall have the right to terminate this Agreement:

       

      (a)   upon
        one
        hundred eighty (180) days prior written notice to the other Party, provided
        that
        in the event Client terminates this Agreement, without cause, prior to the
        end
        of the Initial Term, such termination shall be effective only upon payment
        to
        CORD of six (6) months of the System Access Fees set forth on the Fee
        Schedule;

       

      (b)   upon
        the
        breach by the other Party of a material provision of this Agreement and that
        Party’s failure to cure such breach within thirty (30) days following written
        notice thereof from the non-breaching Party, provided that, with respect
        to any
        failure to make any payment when due under this Agreement, such period to
        cure
        shall be reduced to ten (10) days; or

       

      (c)   immediately
        upon notice to the other Party following the commencement of any bankruptcy
        or
        insolvency proceeding (whether voluntary or involuntary) with respect to
        such
        other Party or its assets, which in the event of an involuntary proceeding,
        is
        not dismissed within sixty (60) days, the general assignment for the benefit
        of
        creditors by such other Party, or the appointment of a receiver, trustee
        or
        liquidator by or for such other Party.

       

      6.3   Termination
        or expiration of this Agreement shall not relieve either Party from any
        liability or obligation that accrued prior to such termination or expiration.
        Upon termination or expiration of this Agreement, all Product shall be returned
        to Client or a designee of Client, at Client’s sole cost and expense. Sections
        13 and 14 shall survive termination or expiration of this
        Agreement.

       

      7.   Audits.
        No more
        than twice per calendar year, Client or its designee shall have the right
        during
        normal business hours (i.e., 8:00 a.m. to 5:00 p.m. local time), upon fifteen
        (15) business days prior written notice to CORD, to: ii)
        conduct
        a physical audit of such parties of the Facility that relate solely to Product
        stored and warehoused at the Facility under this Agreement; and iii)
        review
        and audit records that relate solely to the storage and distribution of the
        Product. Notwithstanding the foregoing, Client or its designee may, from
        time to
        time and subject to CORD’s prior consent, perform additional physical audits of
        the Product located at the Facility in the event of a reasonable, documented
        concern related to the state of such Product. Such additional audits shall
        be
        conducted during normal business hours (i.e., 8:00 a.m. to 5:00 p.m. local
        time).

       

      
        
          
          

        

        
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      8.   Compliance
        With Laws.
        Each
        Party shall conduct its activities in connection with this Agreement in
        compliance with all applicable laws, rules, regulations, and orders of
        governmental entities.

       

      9.   Representations
        and Warranties.

       

      9.1   Each
        Party represents and warrants to the other that:

       

      (a)   it
        has
        full power and authority to enter into this Agreement and perform all
        obligations and conditions to be performed by it under this Agreement without
        any restriction by any other Agreement or otherwise;

       

      (b)   the
        execution, delivery and performance of this Agreement have been duly authorized
        by all necessary corporate action of that Party; and

       

      (c)   this
        Agreement constitutes the legal, valid and binding obligation of that
        Party.

       

      9.2   Client
        further represents and warrants to CORD that the Product:

       

      (a)   is
        and
        shall be manufactured in conformity with the Food, Drug and Cosmetic Act,
        as
        amended from time to time, and all other applicable laws, rules, regulations
        and
        orders of governmental entities relating to the manufacture, promotion, sale
        or
        distribution of the Product;

       

      (b)   does
        not
        violate or infringe any patent, trademark, tradename or other interest of
        any
        person or entity.

       

      10.   Taxes.
        Client
        shall pay when due all sales, use, gross receipts, excise, personal property
        taxes associated with the Product (excluding any personal property tax
        associated with CORD’s equipment used in connection with the Services), and
        other taxes now or hereafter imposed as a result of the transactions
        contemplated by this Agreement (other than taxes based on CORD’s net income),
        none of which have been included in the fees payable to CORD under this
        Agreement; provided that the amounts payable by Client under this section
        shall
        not include taxes based on the net income of CORD.

       

      11.   Trademarks.
        Neither
        Party shall have the right to use the name of the other Party or any Affiliate
        of the other Party, or the other Party’s or such Affiliates’ trademarks, service
        marks, logos, or other similar marks in any manner except with the prior
        written
        approval of that Party; provided that the foregoing shall not prohibit CORD’s
        use of Client names or marks in connection with the performance of the Services
        in a manner consistent with this Agreement. “Affiliate,” as used in this
        Agreement, means any legal entity which, during the Term hereof, controls,
        is
        controlled by, or is under common control with, such Party. For purposes
        of this
        definition, an entity shall be deemed to control another entity if it owns
        or
        controls, directly or indirectly, at least fifty percent (50%) of the voting
        interest of all equity interests of the other entity (or other such comparable
        ownership interest for an entity other than a corporation).

       

      
        
          
          

        

        
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      12.   Confidentiality.

       

      12.1   Each
        Party acknowledges that as a result of this Agreement it may learn and have
        access to trade secrets and other confidential and proprietary information
        of
        the other Party through employees, representatives and/or agents acting on
        behalf of or subcontracted to either Party (collectively the “Representatives”),
        including without limitation, financial information, information regarding
        business practices and techniques, customer lists and systems and technology
        information, or any information identified as confidential in writing by
        either
        Party (the “Confidential Information”). For purposes of this Agreement,
        Confidential Information shall not include information disclosed by one Party
        to
        the other Party to the extent that such information can be proven by written
        evidence: b)
        to be in
        the public domain or generally available in the industry in which the disclosing
        Party engages in business without any violation of this Agreement by the
        other
        Party; c)
        is
        already legally known to the other Party or any of its Affiliates at the
        time of
        its disclosure by the disclosing Party; d)
        becomes
        known to the other Party or any of its Affiliates from a third party without
        any
        obligation of confidentiality or limitation on use; or e)
        is
        independently developed by the other Party or any of its Affiliates prior
        to the
        date of its disclosure. The specific material terms of this Agreement shall
        be
        deemed to be the Confidential Information of each Party. Confidential
        Information shall not be deemed to be in the public domain or publicly known
        or
        in the receiving Party’s possession because it is embraced by more general
        information in the receiving Party’s possession or because it is embraced in
        general terms in publications.

       

      12.2   Neither
        Party shall, directly or indirectly, at any time: f)
        disclose
        to any third person or entity any Confidential Information of the other Party
        (whether learned before or after the date of this Agreement), or g)
        use, or
        permit or assist any third person or entity to use, any such Confidential
        Information, excepting only: (1)
        disclosures required by law, rule, regulation or order, as reasonably determined
        by the disclosing Party or its legal counsel, and (2)
        disclosures on a confidential basis to directors, officers, employees, and
        agents of that Party or its Affiliates who have a reasonable need to know
        such
        Confidential Information in the normal course of business of that Party or
        any
        of that Party’s Affiliates.

       

      12.3   The
        obligations of confidentiality hereunder shall survive the termination of
        this
        Agreement for a period of three (3) years. Upon termination of this Agreement
        (for any reason) each Party shall promptly: (3)
        return
        to the other Party all documentation and other materials (including copies
        of
        original documentation or other materials) containing any Confidential
        Information of the other Party; or (4)
        with the
        other Party’s consent, which consent will not be unreasonably withheld, certify
        to the other Party, pursuant to a certificate in form and substance reasonably
        satisfactory to the other Party, as to the destruction of all such documentation
        and other materials.

       

      13.   Indemnification.
        Each
        Party shall indemnify and hold harmless the other Party and its parent and
        Affiliates, and each of their directors, officers, employees, agents, and
        representatives from and against all claims, liabilities, losses, damages,
        costs, and expenses, including, without limitation, reasonable attorneys’ fees
        (“Liability”) to a third party or property arising directly or indirectly out of
        any failure of that Party to perform fully all obligations and conditions
        to be
        performed by that Party pursuant to this Agreement or any breach of any warranty
        made by that Party in this Agreement. Client further agrees to indemnify
        and
        hold harmless CORD, its parent and Affiliates and each of their directors,
        officers, employees, agents and representatives from any and all Liability
        arising directly or indirectly out of injury or death to person or property
        alleged to have been caused by Client’s Product.

       

      
        
          
          

        

        
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      14.   Limitation
        of Liability.
        NOTWITHSTANDING THE FOREGOING PROVISIONS OF SECTION 13, OR ANY OTHER PROVISION
        OF THIS AGREEMENT TO THE CONTRARY, NEITHER PARTY SHALL BE LIABLE TO THE OTHER
        PARTY FOR ANY CONSEQUENTIAL (SPECIFICALLY EXCEPTING THOSE CONSEQUENTIAL DAMAGES
        ARISING FROM EACH PARTY’S OBLIGATION TO INDEMNIFY THE OTHER FOR LIABILITY
        ARISING OUT OF OR RELATING TO THIRD PARTY CLAIMS IN ACCORDANCE WITH SECTION
        13
        ABOVE), INCIDENTAL, INDIRECT, SPECIAL, OR OTHER SIMILAR DAMAGES ARISING OUT
        OF
        OR IN CONNECTION WITH THIS AGREEMENT.

       

      15.   Insurance.
        During
        the term of this Agreement and for as long thereafter as necessary to cover
        claims resulting from this Agreement, Client shall maintain: (5)
        product
        liability and commercial general liability insurance having a limit of not
        less
        than $5 million; and (6)
        property
        damage insurance at replacement value for the Product located at the CORD
        Facility or in transit to or from the CORD Facility, pursuant to one or more
        insurance policies with reputable insurance carriers. Cardinal Health, Inc.
        and
        its subsidiaries shall be designated as “additional insureds” under the product
        liability and commercial general liability insurance policy(ies) and under
        the
        property damage insurance policy(ies). Prior to the Commencement Date, Client
        shall deliver to CORD certificates evidencing such insurance. Client shall
        not
        cause or permit such insurance to be canceled or modified to materially reduce
        its scope or limits of coverage during the term of this Agreement or thereafter
        as provided above. Except for any losses resulting solely from the gross
        negligence or intentional misconduct of CORD, Client shall bear all risk
        of loss
        or damage with respect to the Product, whether located at the Facility or
        otherwise.

       

      16.   Dispute
        Resolution.
        The
        Parties agree to use good faith efforts to resolve all disputes within ninety
        (90) days of written notice that such a dispute exists. If dispute under
        this
        Agreement cannot be resolved by the Parties within such sixty (60) day period,
        the Parties agree to refer the matter to one executive from each Party not
        directly involved in the dispute for review and resolution. A copy of the
        terms
        of this Agreement, agreed upon facts and areas of disagreement, and a concise
        summary of the basis for each side’s contentions will be provided to both
        executives who shall review the same, confer, and attempt to reach a mutual
        resolution of the issue within forty-five (45) days after receipt of the
        materials referenced above. If the matter has not been resolved within such
        forty-five (45) day period, either or both Parties may pursue resolution
        of the
        matter through litigation or other process available under law or
        equity.

       

      17.   Miscellaneous.

       

      17.1   Relationship
        of the Parties.
        The
        relationship among the Parties is that of independent contractors, and this
        Agreement does not establish or create a partnership, joint venture, or other
        agency relationship among the Parties.

       

      
        
          
          

        

        
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      17.2   Notices.
        Any
        notice or other communication required or desired to be given to any Party
        under
        this Agreement shall be in writing and shall be deemed given: ii)
        three
        business days after such notice is deposited in the United States mail,
        first-class postage prepaid, and addressed to that Party at the address for
        such
        Party set forth at the end of this Agreement; iii)
        one
        business day after delivered to Federal Express, Airborne, or any other similar
        express delivery service for delivery to that Party at that address; or
iv)
        when
        sent by facsimile transmission, with electronic confirmation, to that Party
        at
        its facsimile number set forth at the end of this Agreement. Any notice
        delivered by facsimile transmission will be deemed delivered upon electronic
        confirmation provided the notice is also deposited in the U.S. mail, first-class
        postage prepaid. Any Party may change its address or facsimile number for
        notices under this Agreement by giving the other Parties notice of such
        change.

       

      17.3   Governing
        Law.
        This
        Agreement shall be construed under the laws of the State of Tennessee, without
        regard to its conflicts of laws provisions.

       

      17.4   Severability.
        If any
        term of this Agreement is declared invalid or unenforceable by a court or
        other
        body of competent jurisdiction, the remaining terms of this Agreement will
        continue in full force and effect.

       

      17.5   Non-Waiver.
        No
        failure by either Party to insist upon strict compliance with any term of
        this
        Agreement, to enforce any right, or to seek any remedy upon any default of
        the
        other Party shall affect, or constitute a waiver of, the first Party’s right to
        insist upon strict compliance, to exercise that option, to enforce that right,
        or to seek that remedy with respect to that default or any prior,
        contemporaneous, or subsequent default. No custom or practice of the Parties
        at
        variance with any provision of this Agreement shall affect, or constitute
        a
        waiver of, that Party’s right to demand strict compliance with all provisions of
        this Agreement.

       

      17.6   Force
        Majeure.
        If the
        performance of any part of this Agreement by either Party shall be prevented,
        restricted, interfered with or affected for any length of time by fire or
        other
        casualty, government restrictions, war, riots, strikes or labor disputes,
        lock
        out, transportation delays, acts of God, or any other causes which are beyond
        the reasonable control of such Party, such Party shall not be responsible
        for
        delay or failure of performance of this Agreement for such length of time,
        provided, however, that the obligation of one Party to pay amounts due to
        the
        other Party shall not be subject to the provisions of this Section.

       

      17.7   Complete
        Agreement.
        This
        Agreement constitutes the entire understanding between the Parties and
        supersedes any contracts, agreements or understanding (oral or written) of
        the
        Parties with respect to the subject matter hereof. No term of this Agreement
        may
        be amended except upon written agreement of both Parties, unless provided
        otherwise in this Agreement.

       

      17.8   Assignment.
        Except
        as set forth herein, neither Party shall have the right to assign this
        Agreement, or any of such Party’s rights or obligations under this Agreement,
        without the prior written consent of the other Party, provided, however,
        that
        CORD may assign its rights under this Agreement to any parent, subsidiary
        or
        affiliate without obtaining such consent. This Agreement shall be binding
        upon,
        inure to the benefit of, and be enforceable by and against the respective
        successors and assigns of the Parties.

       

      17.9   Independent
        Contractor.
        The
        relationship of the Parties is that of independent contractors, and neither
        Party shall incur any debts or make any commitments for the other Party except
        to the extent expressly provided in this Agreement. Nothing in this Agreement
        is
        intended to create or shall be construed as creating between the Parties
        the
        relationship of joint ventures, co-partners, employer, employee or principal
        and
        agent.

       

      
        
          
          

        

        
          8

          
            

          

        

        
          
          

        

      

       

      IN
        WITNESS WHEREOF, the undersigned acknowledge and accept the terms of this
        Agreement and have duly executed this Agreement.

      

       

      
        	
                CORD
                  LOGISTICS, INC.

                 

                By:
                  /s/ Frank
                  C.
                  Wegerson                      

                    
                  Frank
                  C. Wegerson

                    
                  Vice
                  President and General Manager

                 

                15
                  Ingram Boulevard 

                LaVergne,
                  TN 37086 

                Facsimile
                  No. (615) 793-4783

                 

              	
                ALLIANCE
                  PHARMACEUTICAL CORP. 

                 

                By:
                  /s/
                  Jack
                  DeFranco                                

                    
                  B.
                  Jack DeFranco

                    
                  Vice
                  President, Marketing &
                  Business Development 

                 

                3040
                  Science Park Road 

                San
                  Diego, CA 92121 

                Facsimile
                  No.: (858) 410-5201

                 

              

      

      

       

      
        
          
          

        

        
          9

          
            

          

        

        
          
          

        

      

      Exhibits

       

      Exhibit
        A   Operating
        Guidelines

       

      Exhibit
        B   Fee
        Schedule

       

      Exhibit
        C   System
        Access Agreement

       

      

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      Alliance
        Pharmaceuticals / CORD Logistics, Inc.

      Exhibit
        A

      Operating
        Guidelines

       

      In
        performing its obligations under the Distribution Services Agreement
        (“Agreement”), CORD Logistics, Inc. (“CORD”) will follow the Operating
        Guidelines as developed jointly with Alliance Pharmaceuticals Corp Inc.
        (“Client”). These Operating Guidelines are in addition to CORD Standard
        Operating Procedures (“SOPs”). Copies of these documents are maintained by both
        parties and will be reviewed, and updated if necessary, from time to time
        as
        mutually agreed, but not less than once per calendar year.

       

      1.0
        WAREHOUSING,

       

      
        	
                1.1

              	
                CORD
                  will maintain its warehouse facility in accordance and comply with
                  all
                  federal, state and local laws, rules and regulations, including
                  the
                  Prescription Drug Marketing Act and current Good Manufacturing
                  Practices
                  (“cGMP”) as promulgated under the
                  FDA.

              

      

       

      
        	
                1.2

              	
                CORD
                  will maintain Standard Operating Procedures appropriate for a
                  pharmaceutical distribution center operating
                  environment.

              

      

       

      
        	
                1.3

              	
                CORD
                  will maintain documented training
                  programs.

              

      

       

      
        	
                1.4

              	
                CORD
                  will comply with storage, handling and shipping conditions designated
                  by
                  Client for the “Products”.

              

      

       

      
        	
                1.5

              	
                Products
                  with specific storage requirements must be identified by Client
                  and the
                  storage requirements must be expressly communicated by Client to
                  CORD. The
                  specific requirements must be identified on the package label in
                  accordance with NWDA bar coding standards. Product so identified
                  by Client
                  will be stored in areas designed, continuously monitored and periodically
                  validated for the temperature range specified for each product.
                  CORD will
                  maintain daily temperature recordings. CORD will provide such records
                  to
                  Client upon written request.

              

      

       

      
        	 	
                1.5.1

              	
                Frozen
                  — minus 20 degrees Celsius

              

      

       

      
        	 	
                1.5.2

              	
                Refrigerated
                  — 2 degrees to 8 degrees Celsius

              

      

       

      
        	 	
                1.5.3

              	
                Controlled
                  ambient — 15 degrees to 25 degrees
                  Celsius

              

      

       

      
        	 	
                1.5.4

              	
                Controlled
                  ambient — 15 degrees to 30 degrees
                  Celsius

              

      

       

      
        	
                1.6

              	
                CORD
                  will report temperature excursions to Client within two (2) business
                  days
                  of occurrence.

              

      

       

      
        	
                1.7

              	
                Products
                  will be stored in an area with secured access, accessible only
                  to
                  authorized CORD personnel as agreed to by Client and
                  CORD.

              

      

       

      2.0
        RECEIVING

       

      
        	
                2.1

              	
                Client
                  or Client’s contract manufacturing agent will arrange transportation
                  services to transfer the product to CORD. Client will notify CORD
                  of the
                  specific delivery schedule. 

              

      

       

      
        
          
          

        

        
          Page
            1

          
            

          

        

        
          
          

        

      

       

      
        	
                2.2

              	
                Client’s
                  carrier will contact CORD to arrange a delivery
                  appointment.

              

      

       

      
        	
                2.3

              	
                Client
                  retains title to the goods at all times. CORD signature on the
                  carrier’s
                  bill of lading is an acknowledgement only of CORD’s receipt of
                  product.

              

      

       

      
        	
                2.4

              	
                Client
                  will provide CORD with Material Safety Data Sheets for each product
                  stored
                  at CORD.

              

      

       

      
        	
                2.5

              	
                Client’s
                  product must meet the following standards for carton identification,
                  documentation, palletization, and
                  uniformity:

              

      

       

      
        	 	
                2.5.1

              	
                Each
                  shipping carton and inner packaging of Client’s product must be labeled to
                  meet NWDA standards for bar coding and human readable
                  markings.

              

      

       

      
        	 	
                2.5.2

              	
                Client
                  will provide the bill of lading, certificate of analysis and other
                  documentation necessary. CORD and Client will mutually agree upon
                  the
                  receiving process.

              

      

       

      
        	 	
                2.5.3

              	
                Pallets
                  will meet GMA standards for 40” x 48” dimensions with four-way entry; will
                  be free of broken boards, treated for pests, and
                  clean.

              

      

       

      
        	 	
                2.5.4

              	
                Receipt
                  of product on non-standard pallets may require restacking onto
                  conforming
                  pallets at Client’s expense.

              

      

       

      
        	 	
                2.5.5

              	
                Palletized
                  product must be uniform and consistent with specifications set
                  up in the
                  product master for the number of cartons and
                  eaches.

              

      

       

      
        	
                2.6

              	
                CORD
                  will receive each shipment into a secure Receiving
                  area.

              

      

       

      
        	
                2.7

              	
                CORD
                  will count and inspect the exterior packaging of the product, noting
                  any
                  shortages, overages or damage on the carrier bill of lading. CORD
                  will
                  obtain the carrier’s signature on the bill of lading acknowledging the
                  condition of the product upon receipt by
                  CORD.

              

      

       

      
        	
                2.8

              	
                CORD
                  will compare the Client documentation to CORD’s receiving report.
                  Discrepancies will be noted. CORD Quality Assurance will investigate
                  and
                  report all discrepancies to Client within 24 hours of receipt.
                  Client and
                  CORD will determine corrective actions, if
                  any.

              

      

       

      
        	
                2.9

              	
                CORD
                  will post receipts in the computer inventory system within one
                  business
                  day of delivery unless count discrepancies, missing paperwork,
                  damage
                  investigation, and other receiving anomalies interfere with efficient
                  receiving and documentation. CORD will use commercially reasonable
                  efforts
                  to receive product accurately and
                  efficiently.

              

      

       

      
        	
                2.10

              	
                CORD
                  reserves the right to assess a fee for services required to hold
                  non-conforming product in receiving, and to investigate, reconcile
                  and
                  report discrepancies to Client. Fees for receiving services are
                  listed in
                  the Fee Schedule, Exhibit C.

              

      

       

      
        	
                2.11

              	
                CORD
                  will return partial case quantities -- defined as less than a saleable
                  quantity - to Client at Client’s
                  expense.

              

      

       

      
        	
                2.12

              	
                Client
                  product in unapproved or quarantine status will be physically segregated
                  and CORD’s computer system will be flagged accordingly to prevent
                  unapproved product from entering approved picking areas of the
                  warehouse.
                  Client will provide written documentation to CORD to change quarantine
                  product to approved status.

              

      

       

      
        
          
          

        

        
          Page
            2

          
            

          

        

        
          [****]
            Represents material which has been redacted pursuant to a request for
            confidential treatment pursuant to Rule 24B-2 under the Securities Exchange
            Act
            of 1934, as amended. The confidential materials have been filed separately
            with
            the SEC.

        

      

       

      
        	
                2.13

              	
                
                  CORD
                    will move product from the Receiving area to bulk storage following
                    CORD
                    SOPs.

                

              

      

       

      3.0
        INVENTORY

       

      
        	
                3.1

              	
                Inventory
                  will be received, tracked and controlled on CORD’s computerized inventory
                  system by item number, lot number, expiration date, quantity, and
                  status.
                  CORD’s system will meet all cGMP requirements for lot traceability and
                  accountability, from receipt of product at CORD to shipment of
                  product to
                  Client’s customer.

              

      

       

      
        	
                3.2

              	
                Quarantined
                  product will be physically segregated and appropriately labeled.
                  Quarantined Product will be released from quarantine status in
                  CORD’s
                  inventory system upon written authorization by
                  Client.

              

      

       

      
        	
                3.3

              	
                CORD
                  will assign unique locations for each product and lot in
                  storage.

              

      

       

      
        	
                3.4

              	
                Inventory
                  will be routinely verified by CORD through periodic cycle counts.
                  CORD
                  will use its best efforts to maintain accurate and timely inventory
                  records.

              

      

       

      
        	
                3.5

              	
                Inventory
                  deviations will be investigated by CORD and reported to Client.
                  Corrective
                  actions will be determined jointly by CORD and
                  Client.

              

      

       

      
        	
                3.6

              	
                Client
                  may conduct a complete physical inventory once per calendar year,
                  upon at
                  least thirty-(30) days advance written notice prior to the start
                  of a
                  physical inventory.

              

      

       

      
        	
                3.7

              	
                CORD
                  will notify Client of all expired or short dated Product (as specified
                  by
                  Client to be “X” number of months prior to expiry
                  date).

              

      

       

      
        	
                3.8

              	
                Disposition
                  of returned, rejected or expired Product will be handled according
                  to
                  Client’s specific written
                  direction.

              

      

       

      4.0
        DISTRIBUTION

       

      
        	
                4.0

              	
                Orders
                  approved and available for processing (pick & pack) by 2:00 p.m.
                  Central Time will be shipped before the close of business the same
                  day,
                  Monday through Friday. Orders received by EDI and approved for
                  inventory
                  allocation by 12:00 noon will be shipped by close of business the
                  same
                  day. Orders received and processed after the cutoff times will
                  be shipped
                  the following business day.

              

      

       

      
        	
                4.1

              	
                Recognizing
                  that order volume may fluctuate from time to time, CORD will staff
                  to meet
                  [****]
                  of
                  the rolling average number of Client orders processed over the
                  previous
                  [****]
                  calendar months. CORD will use commercially reasonable efforts
                  to meet the
                  shipping schedule outlined herein when order or unit volume exceeds
                  [****]
                  of
                  the rolling average number of orders or units; provided, however,
                  that
                  CORD cannot guarantee daily on-time shipping standards will be
                  achieved
                  during such increased activity
                  periods.

              

      

       

      
        	
                4.2

              	
                CORD
                  will measure the timeliness of shipments and will report this attribute
                  periodically according to Section 19 of the Operating
                  Guidelines.

              

      

       

      
        	
                4.3

              	
                Emergency
                  shipments and other exceptions will be authorized in writing by
                  Client.
                  CORD will separately invoice Client for emergency shipments, which
                  are
                  defined as shipments occurring on weekends, holidays, and non-standard
                  hours, as defined in the Fee Schedule, Exhibit
                  C.

              

      

       

      
        
          
          

        

        
          Page
            3

          
            

          

        

        
          
          

        

      

       

      
        	
                4.4

              	
                CORD’s
                  inventory system will comply with First-to-Expire, First-Out (FEFO)
                  inventory allocation. Any exceptions from FEFO must be approved
                  by Client
                  in writing prior to shipment.

              

      

       

      
        	
                4.5

              	
                CORD
                  will provide the system, equipment and procedures, along with trained
                  personnel and supervision to services related to picking product
                  for
                  Client’s customer orders.

              

      

       

      
        	
                4.6

              	
                CORD
                  will perform quality verification on all Client shipments by an
                  individual
                  other than the employee who picked the order. CORD will use commercially
                  reasonable efforts to pick, check and ship accurately all Client
                  customer
                  orders.

              

      

       

      
        	
                4.7

              	
                CORD
                  and Client will mutually determine and agree in writing on the
                  packaging
                  requirements for shipping Client’s finished product(s). CORD’s Quality
                  Assurance will assist Client and CORD will issue appropriate guidelines
                  and training to the Distribution department to assure compliance
                  with
                  Client specifications.

              

      

       

      
        	
                4.8

              	
                Client
                  and CORD will mutually determine and agree on special shipping
                  conditions,
                  such as for refrigerated product, which may be limited to Monday
                  through
                  Thursday shipping, or as otherwise instructed by the
                  Client.

              

      

       

      
        	
                4.9

              	
                CORD
                  will provide shipment confirmation information to Client through
                  CORD’s
                  information system on the same business day on which the shipment
                  occurs.

              

      

       

      
        	
                4.10

              	
                CORD
                  will manage shipping supplies - including vendor selection, ordering,
                  inventory record keeping, and storage. CORD will invoice Client
                  for all
                  shipping materials — corrugated cartons, insulated coolers (if specified),
                  address labels, inner packing — as may be required by Client’s packing
                  specifications, per CORD’s
                  proposal.

              

      

       

      
        	
                4.11

              	
                All
                  Products will be shipped utilizing packaging and shipping carton(s)
                  as per
                  Client’s packaging instructions, or as deemed appropriate by CORD in the
                  absence of Client specifications. Unless instructed otherwise by
                  Client,
                  shipping will occur based on the shipping procedures provided by
                  Client.

              

      

       

      
        	
                4.12

              	
                CORD
                  personnel will be available for emergency product shipments, via
                  phone
                  request, 24 hours per day, 365 days per year. For emergency shipments
                  called in after the carrier’s cutoff time (approximately 8:00 p.m. for
                  overnight airfreight), CORD will ship the product the following
                  day,
                  except Sunday, unless otherwise directed by the Client. CORD’s fees for
                  emergency shipments are set forth in the Fee Schedule, Exhibit
                  C.

              

      

       

      5.0
        TRANSPORTATION

       

      
        	
                5.1

              	
                CORD
                  and Client will mutually agree upon a common carrier (s) based
                  on shipment
                  size, destination, freight rates, availability of standard and
                  special
                  services, reliability of delivery, and claim history among other
                  requirements.

              

      

       

      
        	
                5.2

              	
                CORD
                  shall provide, if Client agrees, carriers under contract with
                  Cardinal-Allegiance for discounted rates. Client and CORD will
                  share the
                  savings according to a formula acceptable to both parties, or ,
                  if Client
                  so chooses and CORD agrees, CORD shall charge a freight management
                  fee
                  according to the Fee Schedule, Exhibit
                  C.

              

      

       

      
        
          
          

        

        
          Page
            4

          
            

          

        

        
          
          

        

         

      

      
        	
                5.3

              	
                Shipping
                  charges, including all special charges for insurance, proof of
                  delivery,
                  hazardous materials, service upgrades, and so forth, will be billed
                  directly to CORD’s account with the carrier and passed through to Client
                  per terms of the Distribution Agreement, inclusive of CORD’s
                  transportation management fees as defined in the Fee Schedule,
                  Exhibit
                  C.

              

      

       

      
        	
                5.4

              	
                Freight
                  terms will be F.O.B. Origin, Freight Prepaid where title passes
                  to the
                  customer when the shipment is tendered to the common
                  carrier.

              

      

       

      
        	
                5.5

              	
                CORD,
                  at the request of the Client, will provide proof of delivery for
                  specific
                  customer shipments. Fees charged by carriers for proofs of delivery,
                  if
                  any, will be passed directly to
                  Client.

              

      

       

      
        	
                5.6

              	
                Client
                  will approve payment of all credits to Client customers for overage,
                  shortage and damage claims related to transportation. CORD, if
                  handling
                  Accounts Receivable for Client, will issue a credit to Client’s customer
                  accordingly, or CORD will provide freight claim documentation to
                  Client
                  when Client is responsible for the Accounts
                  Receivable.

              

      

       

      6.0
        CUSTOMER
        SERVICE

       

      
        	
                6.1

              	
                CORD
                  will provide a dedicated inbound phone line (or lines) for Client’s
                  customers to phone in purchase orders, for inquiries, and for general
                  information.

              

      

       

      
        	
                6.2

              	
                CORD
                  will staff the Client Customer Service inbound phone line from
                  7:00 a.m.-
                  6:00 p.m. central standard time, Monday through Friday, except
                  for the
                  following holidays: Christmas Day, New Year’s Day, Memorial Day,
                  Independence Day, Labor Day, Thanksgiving
                  Day.

              

      

       

      
        	
                6.3

              	
                CORD
                  will be responsible for the training of the customer service
                  representative and backup representative(s). Client will provide
                  company
                  and product specific information for training of the customer service
                  representatives assigned to Client.

              

      

       

      
        	
                6.4

              	
                CORD
                  will be responsible for initial set up and on-going maintenance
                  of
                  customer master files. The initial customer master file will be
                  approved
                  and signed by Client. Client may add customers by completing the
                  customer
                  profile form and forwarding to CORD for system
                  entry.

              

      

       

      
        	
                6.5

              	
                CORD
                  will accept customer orders by electronic data interchange (EDI),
                  phone,
                  mail or fax. 

              

      

       

      
        	
                6.6

              	
                CORD
                  will use commercially reasonable efforts to answer inbound phone
                  calls
                  within the first thirty (30) seconds, and enter orders
                  accurately.

              

      

       

      
        	
                6.7

              	
                Orders
                  received by phone, mail or fax that are entered and approved for
                  shipment
                  by 2:00 p.m. Central Time will be shipped the same day. Orders
                  received by
                  EDI and approved for inventory allocation by 12:00 noon will be
                  shipped
                  the same day. Orders received and processed after the cutoff times
                  will be
                  shipped the following business day.

              

      

       

      
        	
                6.8

              	
                As
                  a backup to the customer service representatives, a voice mail
                  system will
                  be maintained to accept telephone orders and to collect messages
                  from
                  customers.

              

      

       

      
        
          
          

        

        
          Page
            5

          
            

          

        

        
          [****]
            Represents material which has been redacted pursuant to a request for
            confidential treatment pursuant to Rule 24B-2 under the Securities Exchange
            Act
            of 1934, as amended. The confidential materials have been filed separately
            with
            the SEC.

        

      

       

      
        	
                6.9

              	
                
                  CORD’s
                    dedicated customer service line for Client will incorporate programming
                    to
                    forward calls to a Client designated clinical service phone number
                    if
                    calls of a clinical nature are received outside of regular customer
                    service hours.

                

              

      

       

      7.0
        ORDER
        ENTRY

       

      
        	
                7.1

              	
                Client
                  will determine minimum order and order line quantity and CORD will
                  enter
                  orders accordingly.

              

      

       

      
        	
                7.2

              	
                Client
                  will instruct its customers and trading partners to place orders
                  based on
                  the Client’s Distribution
                  Agreement.

              

      

       

      
        	
                7.3

              	
                Client
                  will determine when customers shall pay for premium freight, special
                  handling, and emergency order
                  processing.

              

      

       

      
        	
                7.4

              	
                Client
                  reserves the right to limit quantities, to hold or to refuse orders.
                  These
                  decisions will be executed by CORD.

              

      

       

      
        	
                7.5

              	
                CORD
                  will use commercially reasonable effort to enter orders accurately.
                  CORD
                  measures the accuracy of orders entered and will report this attribute
                  periodically according to the conditions set forth in Section 19
                  of the
                  Operating Guidelines.

              

      

       

      8.0
        CUSTOMER
        CREDIT

       

      
        	
                8.1

              	
                Client
                  will determine the customers to whom it will sell on a direct basis
                  and
                  will assign each to a customer class, sales territory, and other
                  sort
                  classifications, as applicable, based on definitions mutually acceptable
                  to Client and CORD.

              

      

       

      
        	
                8.2

              	
                Client
                  will establish credit limits for each customer or groups of
                  customers.

              

      

       

      
        	
                8.3

              	
                CORD’s
                  system will monitor orders and outstanding account receivable against
                  the
                  customer’s credit limit and hold orders where credit limits are
                  exceeded.

              

      

       

      
        	
                8.4

              	
                Client
                  may elect to place a customer’s account on credit hold so that all orders
                  are reviewed prior to shipment.

              

      

       

      
        	
                8.5

              	
                Client
                  will review and approve all customer orders held for credit limits
                  prior
                  to shipment.

              

      

       

      9.0
        PRICING
        AND TERMS

       

      
        	
                9.1

              	
                Client
                  will publish terms and conditions of sale to wholesalers and warehouse
                  chains. Standard terms are [****]
                  days, net [****]
                  days. Contracted customers may have non-standard
                  terms.

              

      

       

      
        	
                9.2

              	
                Client
                  will publish list prices for wholesalers and warehouses chains
                  and are
                  subject to change from time to time at the sole discretion of
                  Client.

              

      

       

      
        	
                9.3

              	
                Client
                  will determine contract prices on a contract by contract basis.
                  Client
                  will notify CORD of such price changes with seven-(7) days notice
                  for
                  update of the CORD system files. Client will develop and forward
                  customer
                  notifications to CORD and CORD will provide printing and mailing
                  services
                  on behalf of Client.

              

      

       

      
        
          
          

        

        
          Page
            6

          
            

          

        

        
          
          

        

      

       

      
        	
                9.4

              	
                CORD
                  will perform system maintenance of pricing and terms. Client will
                  provide
                  to CORD in writing any changes to prices or terms. CORD will be
                  responsible for updating the CORD system within 48 hours of receipt
                  of
                  such notice or as Client may otherwise
                  instruct.

              

      

       

      
        	
                9.5

              	
                CORD
                  employees are bound by the confidentiality provisions of the Agreement
                  between CORD and Client and as such, shall not disclose Client
                  sales data
                  or pricing information outside the specific CORD employees who
                  have a need
                  to know of this information in the course of performing their routine
                  job
                  responsibilities.

              

      

       

      
        	
                9.6

              	
                CORD
                  will provide the necessary reports within stipulated time frames
                  to ensure
                  Client can comply with the reporting requirements of Medicaid (OBRA),
                  Veterans HealthCare Act, PHS Covered Entities, and state rebate
                  programs.
                  Client will define reporting requirements against which CORD will
                  produce
                  the required reports.

              

      

       

      10.0
        INVOICING

       

      
        	
                10.1

              	
                CORD
                  Customer Service will use commercially reasonable efforts to mail
                  invoices
                  the morning following shipment of product, or transmit by electronic
                  data
                  interchange (EDT), where installed, the same say of shipment of
                  product,
                  to customer’s billing address.

              

      

       

      
        	
                10.2

              	
                For
                  any order shipped after the close of business, the invoice will
                  be
                  prepared and mailed the following business
                  day.

              

      

       

      
        	
                10.3

              	
                CORD
                  will make its best effort to process invoices as timely and accurately
                  as
                  possible. CORD measures invoice accuracy and processing timeliness
                  and
                  will report this attribute periodically according to the conditions
                  set
                  forth in Section 19 of the Operating
                  Guidelines.

              

      

       

      11.0
        CHARGEBACKS

       

      
        	
                11.1

              	
                Client
                  may enter into prime vendor arrangements for select contract or
                  government
                  mandated pricing arrangements.

              

      

       

      
        	
                11.2

              	
                Client
                  will select a wholesaler with full EDI capabilities, including
                  but not
                  limited to purchase orders chargeback submission, chargeback
                  reconciliation and credit, invoicing and bid award
                  notification.

              

      

       

      
        	
                11.3

              	
                CORD,
                  on behalf of Client, will process chargebacks daily with reconciliation
                  of
                  chargeback discrepancies within 5 working days. CORD’s chargeback SOP will
                  define the parameters available to CORD to resolve discrepancies
                  between
                  Client’ contract terms and conditions and the chargeback submitted by
                  the
                  wholesaler.

              

      

       

      
        	
                11.4

              	
                All
                  chargebacks will be processed according to the chargeback policy
                  for
                  Client.

              

      

       

      
        	
                11.5

              	
                All
                  validated chargeback submissions will be settled via credit invoice.
                  Client will not make advance payments or authorize advance deductions
                  of
                  chargebacks.

              

      

       

      
        	
                11.6

              	
                Prime
                  vendors will be instructed to report all returns from Client’s contract
                  customers as a reverse chargeback.

              

      

       

      
        
          
          

        

        
          Page
            7

          
            

          

        

        
          
          

        

      

       

      
        	
                11.7

              	
                CORD
                  will make its best effort to process chargebacks as timely and
                  accurately
                  as possible. CORD measures the chargeback discrepancy rate and
                  timeliness
                  of chargebacks processed and will report this attribute periodically
                  according to the conditions set forth in Section 19 of the Operating
                  Guidelines.

              

      

       

      12.0
        ACCOUNTS
        RECEIVABLE

       

      
        	
                12.1

              	
                Client
                  will open and maintain a bank lockbox. The bank will receive customer
                  remittances invoice information on behalf of
                  Client.

              

      

       

      
        	
                12.2

              	
                Client’
                  bank will forward information about lockbox deposits along with
                  the
                  customer’s remittance information to
                  CORD.

              

      

       

      
        	
                12.3

              	
                CORD
                  will reconcile and apply the cash receipt to the outstanding account
                  receivable within 24 hours of receipt from the
                  bank.

              

      

       

      
        	
                12.4

              	
                To
                  aid the cash application process, Client will authorize accounts
                  receivable payment terms of one day past published terms. This
                  grace
                  period will not be communicated to
                  customers.

              

      

       

      
        	
                12.5

              	
                CORD
                  will disallow discounts for payments received beyond the payment
                  terms
                  grace period, as indicated by the postmark. CORD will handle the
                  amount of
                  the discount as a balance due on the Accounts Receivable
                  account.

              

      

       

      
        	
                12.6

              	
                CORD’s
                  standard for past due payment collection
                  activity:

              

      

       

      
        	 	
                12.6.1

              	
                Notify
                  by phone all customers with payments that have reached 10 days
                  past due.
                  

              

      

       

      
        	 	
                12.6.2

              	
                Initiate
                  second collection call at 17 to 20 days past
                  due.

              

      

       

      
        	 	
                12.6.3

              	
                Send
                  letter to customer at ten (10) days past due with Client’s approval.
                  

              

      

       

      
        	 	
                12.6.4

              	
                Forward
                  to an outside agency for collection with approval of
                  Client.

              

      

       

      
        	
                12.7

              	
                CORD
                  will maintain notes related to collection activities in a Accounts
                  Receivable system file that will be accessible to Client’ authorized
                  personnel.

              

      

       

      
        	
                12.8

              	
                CORD
                  will use commercially reasonable effort to process accounts receivable
                  as
                  timely and accurately as possible. CORD, at Client’s option, may measure
                  accounts receivable and collections activity report these attribute
                  periodically according to the conditions to be defined and mutually
                  agreed
                  upon by CORD and Client.

              

      

       

      13.0
        GOVERNMENT
        REPORTING

       

      
        	
                13.1

              	
                CORD
                  personnel will provide the following Government reports to Client
                  by the
                  fifth business day following the close of a business
                  quarter.

              

      

       

      
        	 	
                13.1.1

              	
                IFF
                  Direct Sales Report

              

      

       

      
        	 	
                13.1.2

              	
                IFF
                  Indirect Sales Report

              

      

       

      
        	 	
                13.1.3

              	
                AMP
                  Report

              

      

       

      
        	 	
                13.1.4

              	
                Non
                  FAMP Report

              

      

       

      
        
          
          

        

        
          Page
            8

          
            

          

        

        
          
          

        

      

       

      
        	 	
                13.1.5

              	
                Best
                  Price Report

              

      

       

      
        	 	
                13.1.6

              	
                Most
                  Favored Price Report

              

      

       

      
        	
                13.2

              	
                CORD
                  will also provide supporting schedules and source documents to
                  be used by
                  Client to perform verification of the Government
                  reports.

              

      

       

      14.0
        MONTH-END
        CLOSE

       

      
        	
                14.1

              	
                CORD
                  will comply with month-end reporting requirements as specified
                  by
                  Client.

              

      

       

      
        	
                14.2

              	
                Client
                  will complete its close by the 5th
                  working day after the last day of the month being
                  closed.

              

      

       

      15.0
        RETURN
        GOODS

       

      
        	
                15.1

              	
                Returns
                  will be processed according to the Return Procedures defined by
                  Client.

              

      

       

      
        	
                15.2

              	
                CORD
                  will complete the processing of all returns and issue credits within
                  5
                  business days of receipt of the
                  return.

              

      

       

      
        	
                15.3

              	
                CORD
                  will use commercially reasonable efforts to process return goods
                  as timely
                  and accurately as possible.

              

      

       

      16.0
        RECALL
        ASSISTANCE

       

      
        	
                16.1

              	
                Client
                  is responsible for management of a recall event, including but
                  not limited
                  to preparation of the letter of notification to customers, coordination
                  and reporting with FDA, tracking of recalled product by customer,
                  follow
                  up letters to customers, and final disposition of
                  product.

              

      

       

      
        	
                16.2

              	
                CORD
                  will provide the necessary recall reports within two hours of notification
                  by Client. Reports will contain, but not be limited to, the following
                  information for each recalled product and lot number: all customer
                  shipments by date, item number, quantity, lot number, and ship
                  to
                  address.

              

      

       

      
        	
                16.3

              	
                CORD
                  will provide a secure area for the receipt of recalled product.
                  CORD will
                  assist Client with inventory
                  reconciliation.

              

      

       

      
        	
                16.4

              	
                CORD
                  will provide destruction services for recalled product as may be
                  required
                  by Client.

              

      

       

      17.0
        SYSTEMS

       

      
        	
                17.1

              	
                Client
                  retains ownership to all data in the CORD system related to Client’
                  business.

              

      

       

      
        	
                17.2

              	
                CORD
                  will maintain security of the Client’s data in files segregated and
                  inaccessible to other CORD Client, to CORD’s parent organization Cardinal
                  Health, or to any other entity as determined by the
                  Client.

              

      

       

      
        
          
          

        

        
          Page
            9

          
            

          

        

      

       

      
        	
                17.3

              	
                
                  CORD
                    will provide Client with on-line access to sales information,
                    inventory
                    records, lot tracking, customer profiles, item maintenance, pricing
                    and
                    terms, and other business critical data as defined in CORD’s standard
                    reports output.

                

              

      

       

      
        	
                17.4

              	
                Reporting
                  and interfaces will be defined by Client and jointly agreed upon
                  with
                  CORD. 

              

      

       

      
        	
                17.5

              	
                CORD
                  will maintain all systems within the change control
                  SOPs.

              

      

       

      
        	
                17.6

              	
                CORD’s
                  system will be accessible by Client 7:30 a.m. - 7:30 p.m. Central
                  Time,
                  Monday through Friday except for routine, scheduled
                  maintenance.

              

      

       

      
        	
                17.7

              	
                Unscheduled
                  system downtime per calendar quarter shall not exceed 2% of the
                  normally
                  accessible access hours. CORD will immediately notify Client of
                  any system
                  problem that might affect services and an estimated time for restoration
                  of system access.

              

      

       

      
        	
                17.8

              	
                Full
                  system backups will be generated on a nightly basis in conjunction
                  with
                  SOP IS-005 ‘Backup and Recovery’. These backup tapes will be sorted either
                  off-site or in a
                  fireproof cabinet as indicated by the
                  SOP.

              

      

       

      18.0
        AUDITS
        / INVENTORIES

       

      
        	
                18.1

              	
                Upon
                  not less than ten (10) days prior written notice, Client personnel
                  and
                  their representatives will have access to CORD facilities for review
                  and
                  audit of CORD’s facility and records to assure compliance with cGMP’s,
                  standard operating procedures, guidelines, and Client specific
                  agreements.

              

      

       

      
        	
                18.2

              	
                Client
                  may request one complete physical inventory of Client products
                  every 12
                  months. 

              

      

       

      
        	
                18.3

              	
                CORD
                  will assist Client with inspections/audits ordered by the Federal
                  Food
                  & Drug Administration or other governmental or official
                  agencies.

              

      

       

      
        	
                18.4

              	
                CORD
                  will notify Client immediately of any inspection activity by FDA,
                  DEA or
                  other government agency, as applicable to the Client or Client’s
                  product.

              

      

       

      19.0
        QUALITY
        COUNCIL REPORT

       

      
        	
                19.1

              	
                CORD
                  will provide Client with a periodic report on measurable attributes,
                  as
                  identified in preceding sections, to be used to track and benchmark
                  performance. The frequency of the report will be determined jointly
                  by
                  CORD and Client.

              

      

       

      
        	
                19.2

              	
                Client
                  and CORD will agree to meet periodically to review performance
                  and to
                  develop methods, policies, practices, and procedures that may improve
                  the
                  quality and efficiency of the CORD - Client
                  relationship.

              

      

       

      
        	
                19.3

              	
                CORD
                  will use its best efforts to meet or exceed the Client’s expectation for
                  performance based on the measured
                  attributes.

              

      

       

      
        
          
          

        

        
          Page
            10

          
            

          

        

        
          [****]
            Represents material which has been redacted pursuant to a request for
            confidential treatment pursuant to Rule 24B-2 under the Securities Exchange
            Act
            of 1934, as amended. The confidential materials have been filed separately
            with
            the SEC.

        

      

       

      
        	
                19.4

              	
                Measured
                  attributes and standards:

              

      

       

      
        	
                Section

                 

              	
                Performance
                  Attribute

                 

              	
                Performance
                  Standard

                 

              	
                    Reporting
                  Frequency

                 

              
	
                1.0

                 

              	
                Temperature
                  excursions

                 

              	
                [****]
                  excursion -free

                 

              	
                    Upon
                  occurrence

                 

              
	
                
                  2.0

                

                 

              	
                On-time
                  receipts and data entry

                 

              	
                [****]
                  within [****]
                  business hours for all conforming receipts

                 

              	
                    Monthly

                 

              
	
                3.0

                 

              	
                Cycle
                  count accuracy

                 

              	
                [****]

                 

              	
                    Monthly

                 

              
	
                4.0

                 

              	
                On-time
                  shipping

                 

              	
                [****]
                  same day for orders received

                by
                  the standard cut-off time

                 

              	
                    Monthly

                 

              
	
                4.0

                 

              	
                Picking
                  / shipping accuracy

                 

              	
                [****] for
                  all orders processed with carton markings meeting NWDA bar code
                  standards

                 

              	
                    Monthly

                 

              
	
                6.0

                 

              	
                Answer
                  inbound phone calls within thirty (30)

                seconds

                 

              	
                [****]
                  answered within [****] seconds

                 

              	
                    Monthly

                 

              
	
                7.0

                 

              	
                Order
                  entry accuracy

                 

              	
                [****]

                 

              	
                    Monthly

                 

              
	
                10.0

                 

              	
                Invoicing
                  accuracy and timeliness

                 

              	
                [****]

                 

              	
                    Monthly

                 

              
	
                11.0

                 

              	
                Chargeback
                  processing time

                 

              	
                [****]
                  processed in [****]
                  days or less from receipt of chargeback from wholesaler

                 

              	
                    Monthly

                 

              
	
                11.0

                 

              	
                Chargeback
                  discrepancy rate

                 

              	
                [****]
                  or
                  Less

                 

              	
                    Monthly

                 

              
	
                12.0

                 

              	
                Accounts
                  receivable

                 

              	
                Based
                  on Client specifications; standard TBD.

                 

              	
                    TBD

                 

              
	
                14.0

                 

              	
                Return
                  goods processing cycle time

                 

              	
                [****]
                  processed in [****]
                  business days

                or
                  less

                 

              	
                    Monthly

                 

              
	
                17.0

                 

              	
                System
                  availability

                 

              	
                >[****]
                  of
                  normal accessible hours

                 

              	
                    Upon
                  occurrence

                 

              

      

      

      
        
          
          

        

        
          Page
            11

          
            

          

        

        
          [****]
            Represents material which has been redacted pursuant to a request for
            confidential treatment pursuant to Rule 24B-2 under the Securities Exchange
            Act
            of 1934, as amended. The confidential materials have been filed separately
            with
            the SEC.

        

      

      
        	
                
                  Alliance
                    Pharmaceutical

                

                ESTIMATED
                  SCHEDULE

                Exhibit
                  B

              
	 
	
                Program
                  implementation

              	 
	 	
                One
                  Time Start-up Fee(2)

              	
                $[****]

              
	
                 

                Distribution
                  Services

              	 
	 	
                Monthly
                  per pallet ambient storage(5)

              	
                $[****]

              
	 	
                Ambient
                  product pick/pack/stage - first full case picked(1)

              	
                $[****]

              
	 	
                Ambient
                  product pick/pack/stage-each add’l case picked(1)

              	
                $[****]

              
	 	
                Surcharge
                  for loose case pick orders less than shelf pack of less than
                  5

              	
                $[****]

              
	 	
                Per
                  case sample product pick/pack/stage - (1)

              	
                $[****]

              
	 	
                Monthly
                  distribution system access and use(1)

              	
                $[****]

              
	 	
                Monthly
                  account management fee (6)

              	
                $[****]

              
	 	
                Emergency/International
                  Orders

              	
                $[****]

              
	 	
                Packing
                  /Shipping Supplies(3)

                (includes
                  ordering, receiving, storage)

              	
                Cost
                  plus [****]
                  handling fee

              
	 	
                Shipping
                  charges (4)

              	
                Cost
                  plus [****]
                  handling fee

              
	
                 

                Customer
                  Service

              	 
	 	
                Monthly
                  fixed fee

              	
                $[****]

              
	 	
                Per
                  order fee

              	
                $[****]

              
	 	
                Per
                  credit memo

              	
                $[****]

              
	
                 

                Financial
                  Services

              	 
	 	
                Monthly
                  fixed fee Accounts Receivable Management

              	
                $[****]

              
	 	
                Per
                  order fee Accounts Receivable Management

              	
                $[****]

              
	 	
                Monthly
                  fixed fee Chargeback Management

              	
                $[****]

              
	 	
                Per
                  submission Chargeback Processing & Government
                  Reporting

              	
                $[****]

              

      

      

      
        
          	
                  Note
                    (1):

                	
                  This
                    proposal is based on the distribution services of Imavist for
                    Alliance as
                    outlined in the RFI received on August 21, 2001. This proposal
                    assumes
                    that there are four vials per case and a minimum of [****] case
                    will be shipped. If the actual average units shipped exceeds
[****] percent,
                    additional charges may be assessed. Other products requiring
                    distribution
                    services, or modified distribution channels, will be quoted separately.
                    If
                    the assumptions change from those presented in the RFI, either
                    partner
                    will have the right to renegotiate the fees and the basis used
                    for quoting
                    these services.

                

        

        
          	 	 

        

        
          	Note (2):	System access fee includes licenses for two
                  concurrent
                  users. Additional licenses required by Alliance will increase the
                  monthly
                  fee by [****]
                  per concurrent user. 

        

        
          	 	 

        

        
          	Note (3): 	The implementation fee is to be paid in [****] installments;
                  the [****] after
                  the implementation meeting and the [****] after
                  the launch. Any additional procedures required for connectivity
                  will be
                  charged accordingly ®[****]
                  (i.e. - Alliance must have a Registered IP address and Local Area
                  Network
                  (LAN)).

        

        
          	 	 

        

        
          	Note (4):	Supplies include boxes, tape, labels, bubble
                  pack, etc
                  (approx. [****] per
                  shipment), pallets if necessary ([****] per
                  pallet), and any other Alliance
                  requirements. 

        

        
          	 	 

        

        
          	Note (5):	A one pound package shipped UPS ground five
                  zones will
                  cost approximately $2.25. 

        

        
          	 	 

        

        
          	Note (5):	The pallet fee is based on a [****] month
                  Inventory on hand. Pallet storage greater than [****] months
                  on hand will be assessed an additional charge of twice the standard
                  fee. 

        

        
          	 	 

        

        
          	Note (7):	The account management fee covers the following
                  services:
                  logistics management, inventory management, regulatory affairs
                  and quality
                  assurance, receiving discrepancy resolution, standard operating
                  procedures, validation management, supply control, process set-ups,
                  and
                  process scheduling.

        

        
          	 	 

        

      

       

       

      
        
          
          

        

        
          Page
            1

          
            

          

        

        
          
          

        

      

      EXHIBIT
        C

       

      SYSTEM
        ACCESS AGREEMENT

       

      This
        System Access Agreement (“Agreement”) is made as of April 1, 2002 between CORD
        Logistics, Inc., an Ohio corporation (“Licensor”), and Alliance Pharmaceutical
        Corp., a New York corporation (“Licensee”), who hereby agree as
        follows:

       

      1.   Exclusive
        Distribution Agreement.
        Licensor
        and Licensee have entered into a Distribution Services Agreement (“Distribution
        Agreement”) of even date with this Agreement, the terms of which are
        incorporated by reference.

       

      2.   System
        Access: Maintenance Obligations.
        Licensor
        hereby grants to Licensee a nonexclusive, nontransferable limited license
        (the
“License”) to utilize Licensor’s Operating
        System Base Package, consisting of the computer hardware (as set forth below),
        software, and other components described in the Distribution Agreement as
        well
        as future upgrades and maintenance of the base package (collectively, the
        “System”), for the information processing needs of Licensee in connection with
        the Services to be provided by Licensor under the Distribution Agreement.
        Licensee shall maintain during the term of this Agreement the local area
        network
        (including without limitation centralized server) and desktop processing
        requirements for the System as further described in the Distribution Agreement
        or the Operating Guidelines, a copy of which are attached to the Distribution
        Agreement as Exhibit A.

       

      During
        the term of this Agreement, Licensor shall employ reasonable security
        measures and
        policies designed to safeguard the integrity, accessibility, and confidentiality
        of all of Licensee’s data resident on the System and establish and maintain
        reasonable disaster and emergency recovery plans designed to minimize disruption
        from System operation interruptions. Licensee shall have the right to review
        the
        operation of the System from time to time during regular business hours,
        upon
        reasonable prior notice and at a time mutually agreeable by the parties;
        provided that such reviews shall be conducted in a manner to avoid disruption
        of
        Licensor’s business operations.

       

      3.   Lease
        of Hardware.
        Licensee
        shall have the right to lease a router (“Hardware”) from Licensor during the
        term of this Agreement, at no additional cost to Licensee, other than the
        Fee
        set forth in the Distribution Agreement. The Hardware shall be kept by Licensee
        (a) subject to inspection by Licensor during regular business hours, upon
        reasonable prior notice and at a time mutually agreeable by the parties;
        (b) at
        Licensee’s address, as stated at the end of this Agreement, which Hardware shall
        not be relocated without the prior written consent of Licensor, which consent
        shall not be unreasonably withheld; (c) free of all security interests if
        any
        kind whatsoever, liens, encumbrances and other claims; (d) marked with
        Licensor’s identification marks or numbers and if requested by Licensor,
        conspicuously labeled “supplied by Licensor”; and (e) maintained in good and
        efficient working order, condition and repair, reasonable wear and tear
        excepted.

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

      Licensee
        shall use the equipment with due care to prevent injury thereto, and to any
        person or property and in conformity with all applicable laws, ordinances,
        rules, regulations and other requirements of any insurer or governmental
        bonding
        and with all requirements of the manufacturer with respect to use, maintenance
        and operation of the Hardware. Licensee shall not modify any hardware without
        the prior written consent of Licensor, which may be granted or withheld in
        its
        sole discretion. It is the intention
        and understanding of both Licensor and Licensee that the Hardware shall be,
        and
        at all times remain, separately identifiable personal property of Licensor.
        Licensee shall not permit any Hardware to be installed in or used, stored
        or
        maintained with, any of Licensee’s personal property in such manner or under
        such circumstances that such Hardware might be or become an accession to
        or
        confused with such other personal property. Licensee shall not permit such
        Hardware to be installed in or used, stored or maintained with, any real
        property in such manner or under such circumstances that any person might
        acquire any rights in such Hardware paramount to the rights of the Licensor
        by
        reason of such Hardware being deemed to be real property or a fixture
        thereon.

       

      Licensee
        shall at all times during the term of this Agreement and until the Hardware
        has
        been returned to Licensor, at its own expense, maintain physical damage
        insurance in the amount of not less than the replacement value of the Hardware.
        All insurance so maintained shall provide for a thirty (30) day prior written
        notice to Licensor or its assignees of any cancellation or reduction of
        coverages; (ii) an option in Licensor or its assignees to prevent cancellation
        by payment of premiums, (iii) cover the interest of the Licensor and (iv)
        provide that all insurance proceeds shall be payable to the Licensee and
        Licensor, as their respective interests may appear at the time of any such
        payment. Licensor shall be named as an additional insured on any public
        liability insurance policy so maintained. Upon the request of Licensor, Licensee
        shall furnish to Licensor satisfactory evidence of any insurance so
        maintained.

       

      4.   Proprietary
        Rights.
        Licensee
        shall have the right to use the System during the term of this Agreement
        as
        expressly provided in paragraphs 1 and 2 of this Agreement, but not otherwise.
        Licensee shall not assign or otherwise transfer, disclose, copy, modify,
        re-engineer, sell, license, disassemble, or decompile the System or disclose
        or
        permit access to the System or related documentation to any other person
        or
        entity. The System and all parts thereof, in all of their tangible and
        intangible manifestations, all existing or new enhancements, developments,
        derivative works, and other adaptions or modifications to the System (or
        any
        part thereof), and all related proprietary rights, are and shall remain the
        exclusive property of Licensor. Except for the License and the lease provided
        by
        Section 3, Licensee shall have no right, title, or interest in or to the
        System
        or any part thereof. Upon termination of this Agreement, Licensee shall promptly
        return to Licensor all portions of the System then in Licensee’s possession or
        under its control in accordance with the term set forth in Section 6
        below.

       

      5.   Warranties.
        Licensee
        acknowledges that it has had adequate opportunity to review the System and
        its
        features and operation, and Licensee accepts the System “AS IS” for its use as
        contemplated in the Distribution Agreement. LICENSOR
        MAKES NO REPRESENTATIONS OR WARRANTIES, AND HEREBY EXPRESSLY DISCLAIMS ALL
        REPRESENTATIONS AND WARRANTIES, EXPRESS OR IMPLIED, RELATING DIRECTLY OR
        INDIRECTLY TO THE SYSTEM OR ANY PART THEREOF, INCLUDING WITHOUT LIMITATION
        ANY
        WARRANTIES OF QUALITY, PERFORMANCE, MERCHANTABILITY, OR FITNESS FOR A PARTICULAR
        PURPOSE.

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

         

      

      6.   Limitation
        On Liability. LICENSOR
        SHALL NOT BE LIABLE FOR ANY CONSEQUENTIAL, INDIRECT, SPECIAL, OR OTHER SIMILAR
        DAMAGES ARISING DIRECTLY OR INDIRECTLY OUT OF THE USE OR INABILITY TO USE
        THE
        SYSTEM OR ANY PART THEREOF, EVEN IF INFORMED OF THE POSSIBILITY OF SUCH DAMAGES,
        WHETHER CLAIMED UNDER CONTRACT, TORT, OR ANY OTHER LEGAL
        THEORY.

       

      IF
        ANY OF THE LIMITATIONS ON THE LIABILITY OF LICENSOR CONTAINED IN THIS AGREEMENT
        ARE FOUND TO BE INVALID OR UNENFORCEABLE FOR ANY REASON, THEN LICENSOR AND
        LICENSEE EXPRESSLY AGREE THAT THE MAXIMUM AGGREGATE LIABILITY OF LICENSOR
        FOR
        ALL CLAIMS RELATING TO THE SYSTEM SHALL NOT EXCEED 100% OF THE AGGREGATE
        BASE
        PACKAGE FEES PAID BY LICENSEE TO LICENSOR FOR LICENSEE’S USE OF THE SYSTEM UNDER
        THE DISTRIBUTION AGREEMENT.

       

      7.   Taxes.
        Licensee
        shall pay when due all sales, use, gross receipts, excise, property, and
        other
        taxes (other than taxes based upon Licensee’s net income) now or hereafter
        imposed as a result of the transactions contemplated by this
        Agreement.

       

      8.   System
        Availability.
        The
        System shall be available for access twenty-four (24) hours a day, seven
        (7)
        days a week, except for scheduled maintenance periods.

       

      9.   Term.
        The
        term of this Agreement shall begin upon Licensee’s initial use of the System as
        evidenced by the first entry of inventory into the System (which may be a
        date
        earlier than the Commencement Date specified for the Distribution Agreement)
        and
        shall end: (a) automatically upon the termination of the Distribution Agreement
        (for any reason), or (b) on any earlier date specified by Licensee in notice
        to
        Licensor given not less than ninety (90) days prior to the specified termination
        date; provided that: (i) paragraphs 4 through 10 inclusive shall survive
        the
        termination of this Agreement, and (ii) no termination of this Agreement
        shall
        affect any liabilities arising from, or based upon, acts or omissions occurring
        prior to such termination.

       

      10.   Expiration/Termination.
        Licensee
        shall continue to have access to the System for a reasonable period of time
        (not
        be exceed ninety (90) days) following termination of this Agreement solely
        for
        purposes of retrieving and transferring to a separate system Licensee’s data
        relating to its pre-termination operations, and Licensor shall reasonably
        cooperate with Licensee to preserve the integrity and accessibility of
        Licensee’s data during such period; provided that, during such period, Licensee
        shall continue to pay the full Base Package and other fees payable by Licensee
        under the Distribution Agreement and comply with all other requirements imposed
        upon Licensee under this Agreement.

       

      Upon
        the
        expiration of this Agreement, Licensee shall return the Hardware to Licensor
        in
        the same condition and configuration as received, reasonable wear and tear
        excepted.

       

      11.   Notices.
        Any
        notice or other communication required or desired to be given to either Party
        under this Agreement shall be in writing and shall be deemed given: (a) five
        (5)
        days after mailing, if deposited in the United States mail, first-class postage
        prepaid, and addressed to that Party at its address set forth at the end
        of this
        Agreement; (b) when received if delivered to Federal Express or any other
        similar overnight delivery service for delivery to that Party at that address;
        or (c) when sent by facsimile transmission, with electronic confirmation,
        to
        that Party at its facsimile number set forth at the end of this Agreement.
        Either Party may change its address or facsimile number for notices under
        this
        Agreement by giving the other Party notice of such change.

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

      12.   Remedies.
        Licensee
        shall indemnify Licensor and its affiliates, directors, officers, employees,
        agents, and representatives against all claims, liabilities, losses, damages,
        costs, and expenses (including without limitation reasonable attorneys’ fees)
        arising directly or indirectly out of any failure of Licensee to perform
        fully
        all obligations and conditions to be performed by Licensee pursuant to this
        Agreement. Licensee acknowledges that in the event of any violation by it
        of any
        of the provisions of paragraph 2 (Proprietary Rights) of this Agreement,
        Licensor would suffer irreparable harm and its remedies at law would be
        inadequate. Accordingly, in the event of any violation or attempted violation
        of
        any such provisions by Licensee, Licensor shall be entitled, in addition
        to any
        other rights or remedies which may be available to Licensor, to a temporary
        restraining order, temporary and/or permanent injunctions, specific performance,
        and other equitable relief, without the showing of irreparable harm, injury,
        damage or the inadequacy of damages, and without the necessity of the posting
        of
        any bond.

       

      13.   Force
        Majeure.
        Notwithstanding any other provisions of this Agreement or the Distribution
        Agreement to the contrary, each Party’s obligations under this Agreement
        (exclusive of payment obligations) shall be excused if and to the extent
        that
        any delay or failure to perform such obligations is due to fire or other
        casualty, government restrictions, war, riot, strikes or labor disputes,
        acts of
        God, or other causes beyond the reasonable control of that Party; provided,
        however, that any party hindered by such condition beyond its reasonable
        control
        must employ reasonable efforts to overcome such hindrance as promptly as
        practicable.

       

      14.   Successors.
        Licensee
        shall not assign or otherwise transfer this Agreement or any of its rights
        or
        obligations under this Agreement without the prior written consent of Licensor,
        which consent shall not be unreasonably withheld. Subject to the preceding
        sentence, this Agreement shall be binding upon, inure to the benefit of,
        and be
        enforceable by and against the respective successors and assigns of each
        Party.

       

      15.   Interpretation.
        This
        Agreement shall be governed by and construed in accordance with the laws
        of the
        State of Ohio. If and to the extent that any court of competent jurisdiction
        determines that it is impossible to construe any provision of this Agreement
        consistently with any law or public policy and consequently holds that provision
        to be invalid, such holding shall in no way affect the
        validity of the other provisions of this Agreement, which shall remain in
        full
        force and effect.

       

      16.   Complete
        Agreement.
        This
        Agreement (together with the Distribution Agreement, which is hereby
        incorporated herein by reference) constitutes the entire Agreement between
        the
        Parties with respect to the subject matter of this Agreement and supersedes
        all
        prior or contemporaneous discussions, negotiations, representations, warranties,
        or Agreements relating to the subject matter of this Agreement. This Agreement
        may not be amended or otherwise modified except by a written instrument signed
        by each Party.

       

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

      IN
        WITNESS WHEREOF, the undersigned acknowledge and accept the terms of this
        Agreement and have duly executed this Agreement.

       

      
        	
                CORD LOGISTICS, INC.

                 

                By: /s/
                  Frank C.
                  Wegerson                     

                    
                  Frank C.
                  Wegerson

                    
                  Vice President
                  and General Manager

                 

                    
                  15 Ingram
                  Boulevard

                    
                  LaVergne, TN
                  37086

                    
                  Facsimile No.
                  (615) 793-4783

              	
                ALLIANCE PHARMACEUTICAL CORP.

                 

                By: /s/
                  Jack
                  DeFranco                                 

                     Jack
                  DeFranco

                     Vice
                  President, Marketing & Business Development

                 

                     3040
                  Science Park Road

                     San
                  Diego, CA 92121

                
                       Facsimile
                    No.: (858) 410-5201EXHIBIT
        10.1 

       

      

      

      

      

      

      

      

      

      

      

      

      

      Auditor’s
        Consent

      

      Statement
        by Experts

      

      

      
        
           

        

        
           

          
            

          

        

        
           

        

      

      CONSENT
        OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

       

  We
    consent to the reference to our firm under the caption “Experts”
    and to the use of our report dated April 1, 2005, except as to Note 3 which
    is as of July 11, 2005 in the Form 20-FR Registration Statement dated July
    26, 2005, Pursuant to Section 12(b) or 12(g) of the Securities and Exchange
    Act of 1934, of Poly-Pacific International Inc. for the registration of 9,361,624
    shares of its common stock.

       

      
        	 	“Collins
                Barrow Edmonton LLP”
	 	Signed
	Edmonton, Alberta	Chartered
                Accountants
	July 26, 2005

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