EXHIBIT 10.1 SECOND AMENDED AND RESTATED LICENSE AND DISTRIBUTION AGREEMENT This Second Amended and Restated License and Distribution Agreement (the "AGREEMENT" or "ARDA II") is entered into as of March 1, 1999 by and between Mallinckrodt Inc., a...

EXHIBIT 10.1

         SECOND AMENDED AND RESTATED LICENSE AND DISTRIBUTION AGREEMENT

         This Second Amended and Restated License and Distribution Agreement
(the "AGREEMENT" or "XXXX XX") is entered into as of March 1, 1999 by and
between Mallinckrodt Inc., a Delaware corporation with an address at 000
XxXxxxxxx Xxxxxxxxx, Post Office Xxx 0000, Xx. Xxxxx, Xxxxxxxx 00000
("MALLINCKRODT"), and Molecular Biosystems, Inc., a Delaware corporation with an
address at 00000 Xxxxxx Xxxxxx Xxxx, Xxx Xxxxx, Xxxxxxxxxx 00000 ("MBI"). This
Agreement is effective when signed by the parties, except as provided in SECTION
16.13.

RECITALS

         A. Mallinckrodt and MBI are parties to a Distribution Agreement dated
as of December 7, 1988, as amended by an Agreement dated November 7, 1989 (the
"ORIGINAL DISTRIBUTION AGREEMENT", and as amended and restated by an Agreement
dated September 7, 1995 (as amended, "ARDA").

         X. Xxxxxxxxxxxx and MBI entered into an Amendment No. 1 to ARDA on
November 4, 1996 (the "NYCOMED TERRITORY AMENDMENT"), and an Amendment to the
Nycomed Territory Amendment on November 4, 1996 (the "SUPPLEMENTAL LETTER").

         C. Under ARDA, as amended by the Nycomed Territory Amendment and the
Supplemental Letter, Mallinckrodt acted solely as a distributor of MBI's
products. The parties now desire that Mallinckrodt manufacture products formerly
supplied to it by MBI.

         X. Xxxxxxxxxxxx and MBI desire to amend and restate ARDA, as amended by
the Nycomed Territory Amendment and the Supplemental Letter, to reflect this
change in the commercial relationship between the parties through this
Agreement, which Agreement supercedes those prior agreements between the
parties.

         Now, therefore, in consideration of their mutual promises, the parties
agree as follows:

                                    ARTICLE 1

                                   DEFINITIONS

         As used in this Agreement, the following terms shall have the meanings
specified below:

         1.01 ADDITIONAL TERRITORY shall mean all of the countries of the world
except the countries included in the Territory , the Nycomed Territory and the
countries represented by the Shionogi Territory.

         1.02 AFFILIATE shall mean with respect to a corporation, association,
partnership, individual, trust or unincorporated organization, any other
corporation, association, partnership, individual, trust or unincorporated
organization that, directly or indirectly, controls, is controlled by or under
common control with such corporation, association, partnership, individual,
trust or unincorporated organization.

         1.03 AGGREGATE NET SALES, as used in SECTIONS 3.02F AND 4.02(b) of this
Agreement, means the sum of Mallinckrodt's Net Sales of each Separate Product
plus the net sales (calculated in the same manner as Mallinckrodt's Net Sales)
of the Separate Product in question by Mallinckrodt's Affiliates.




         1.04 AGREEMENT shall mean this Second Amended and Restated License and
Distribution Agreement ("XXXX XX"), as amended from time to time.

         1.05 ALBUNEX shall mean any product for medical applications, including
all modifications and improvements related thereto, that is an "in vivo"
contrast agent for ultrasound and echocardiography diagnostic imaging and (a)
that is covered by or described in, or manufactured in accordance with a process
covered by or described in, any patent or pending patent application included in
APPENDIX 2, (b) that is functionally similar to a product included in (a) above
and is currently in the possession or control (by license or otherwise) of MBI,
(c) that could be made pursuant to any process referred to in (a) above, whether
or not it is in fact made by that process, or (d) that consists of microbubbles
or hollow microspheres made of a biocompatible material.

         The term "ALBUNEX" includes (but is not limited to) products consisting
of sonicated albumin microspheres containing a perfluorocarbon in gaseous form
and specifically includes the product consisting of sonicated albumin
microspheres containing perfluoropropane which MBI has code-named "FS069"
("FS"), and which is being commercially sold under the trademark
"OPTISON"-Registered Tradmark-.

         1.06 ALBUNEX PRODUCT means each vial size of ALBUNEX manufactured for
commercial sale for which the manufacturer assigns a separate identifying
number. Each vial size of ALBUNEX manufactured for commercial sale shall be
assigned a separate identifying number for each country in which vials of that
size are sold or to be offered for sale. If a particular vial size is labeled in
a manner that permits vials of that size to be sold in more than one country, a
single identifying number shall be assigned in respect of all such countries.

         1.07 ASIAN TERRITORY means, collectively, the countries of Japan, Korea
and Taiwan.

         1.08 AVERAGE SELLING PRICE means, for each Albunex Product which is
sold during any calendar quarter, the quotient obtained by dividing (i) the Net
Sales of that Albunex Product during the quarter by (ii) the number of vials of
that Albunex Product shipped to purchasers during the quarter (including vials
given away in order to provide a discounted purchase price and vials distributed
as samples, but not including vials shipped at no charge for preclinical and
clinical trials). The Average Selling Price for each Albunex Product which is
labeled in a manner that permits vials of that product to be sold in more than
one country shall be determined on a sales-weighted basis by taking into account
the aggregate Net Sales of that Albunex Product in all such countries during the
quarter (i.e., the Average Selling Price shall not be determined by averaging
the Average Selling Price for each such country).

         1.09 CLINICAL REVIEW is defined in SECTION 2.16(1).

         1.10 CONFIDENTIAL INFORMATION shall mean (a) any data or information
relating to ALBUNEX that is competitively sensitive material, and not generally
known to the public, such as, but not limited to, product planning information,
marketing strategies, sales estimates, business plans, and internal performance
results relating to ALBUNEX; (b) any scientific or technical information,
design, process, procedure, formula, or improvement relating to ALBUNEX that is
commercially valuable and secret in the sense that its confidentiality affords
the disclosing party a competitive advantage over its competitors, including
without limitation, the manufacturing techniques, sources of raw material and
composition of matter relating to ALBUNEX; and (c) all confidential or
proprietary concepts, inventions, and information relating to ALBUNEX, including
but not limited to know-how and trade secrets relating to ALBUNEX. Confidential
Information includes without limitation, all documents, inventions, substances,
engineering and laboratory notebooks, drawings, specifications, bills of
material, equipment, prototypes and models relating to ALBUNEX, and any other
tangible manifestation of the foregoing which now exist or come into the control
or possession of the party.

         1.11 CONTRACT RESEARCH ORGANIZATION OR CRO shall mean a person or
entity that assumes, as an independent contractor of a sponsor of a clinical
trial, one or more of the obligations of the sponsor, including but not limited
to, design of a protocol, selection of clinical sites, monitoring of
investigations, evaluation of reports and preparation of materials to be
submitted to the FDA or Foreign Equivalent Authorities.




         1.12 FIRST GENERATION PRODUCT means ALBUNEX with substantially the same
specifications and other characteristics first approved and released for sale in
the United States on October 17, 1994.

         1.13 XX. XXXXXXXXX means Xxxxxx X. Xxxxxxxxx, M.D., or, as the context
may require, his designee for payments under the Xxxxxxxxx License.

         1.14 EFFECTIVE DATE is defined in SECTION 16.13.

         1.15 FDA shall mean the United States Food and Drug Administration, or
any successor agency thereto.

         1.16 XXXXXXXXX LICENSE means the License Agreement, dated as of
November 5, 1986, as Restated on June 1, 1989, between MBI and Xx. Xxxxxxxxx,
and as amended by a letter agreement dated June 14, 1994 (relating to Xx.
Xxxxxxxxx'x designation of a different payee for MBI's payments).

         1.17 FILL OPERATIONS means the act of filling vials and packaging
OPTISON products.

         1.18 FORCE MAJEURE shall mean any act or occurrence beyond the
reasonable control of a party that prevents its performance of any covenant or
obligation under this Agreement including without limitation: (a) lightning,
storms, earthquakes, landslides, flood, washouts, or other acts of God; (b)
fires, explosions, or breakage of or accidents to plant, machinery, equipment,
or storage; (c) shortage of necessary labor, strikes, lockouts, or other labor
disturbances; (d) civil disturbances, sabotage, war, blockades, insurrections,
vandalism, riots, or epidemics; (e) acts of any governmental agency or military
authority; (f) unavailability of utilities or transportation; or, (g) any other
cause, whether enumerated herein or otherwise, that is not reasonably within the
control of the party claiming suspension, which by the exercise of due
diligence, such party is unable to overcome. Notwithstanding the foregoing, the
lack of finances for whatever reason shall in no event be, or be deemed to be, a
cause beyond the party's control.

         1.19 FORECAST is defined in SECTION 2.05(b).

         1.20 FOREIGN EQUIVALENT AUTHORITIES shall mean the organization, body,
or entity of any country outside the United States that performs functions
equivalent to the functions performed by the FDA in the United States.

         1.21 INFOSON means ALBUNEX as developed by Nycomed as of the Effective
Date, having the specifications previously approved for sale in the United
Kingdom.

         1.22 JOINT STEERING COMMITTEE is defined in SECTION 2.16.

         1.23 KNOW-HOW shall mean complete information concerning ALBUNEX,
including but not limited to (a) all Confidential Information of a technical
nature relating to ALBUNEX, (b) all useful pre-clinical, clinical and other data
respecting the safety and efficacy of ALBUNEX, (c) all the records of case
histories of use, medical evaluations, submissions to and correspondence with
the FDA and corresponding foreign agencies relating to ALBUNEX, and (d) all
useful technical data and information, including but not limited to all
documents and prototypes and models actually provided to Mallinckrodt by MBI,
relating to formulas for and the manufacture, use or sale of ALBUNEX owned,
controlled or licensed by MBI which is necessary to or helpful to (i) enable
Mallinckrodt most efficiently to manufacture, use or sell ALBUNEX, or (ii)
obtain any governmental approval to sell ALBUNEX.

         1.24 LAUNCH DATE shall mean October 17, 1994, which was the date that
Mallinckrodt first released the First Generation Product to its sales force for
commercial sale after the FDA issued its initial approval letter for ALBUNEX.
(FOR HISTORICAL PURPOSES ONLY)




         1.25 LOSS shall mean any liability, loss, cost, damage, cost of
settlement in connection with any claim of settlement, or actual expense
reasonably incurred (including, without limitation, reasonable and appropriate
attorneys' fees) sustained by the indemnified party, together with any related
interest and penalties.

         1.26 MALLINCKRODT shall mean Mallinckrodt Inc., a Delaware corporation
(which is the successor in interest to Mallinckrodt Medical, Inc. as a party to
this Agreement).

         1.27 MANUFACTURING OPERATIONS shall mean all activities which are
required to manufacture OPTISON so that it meets all legal requirements for sale
in the Territory, the Additional Territory, or the Nycomed Territory.

         1.28 MANUFACTURING REVIEW is defined in SECTION 2.16(3).

         1.29 MARKETING REVIEW is defined in SECTION 2.16(2).

         1.30 MBI shall mean Molecular Biosystems, Inc., a Delaware corporation.

         1.31 MBI LICENSED PRODUCT shall mean any ultrasound contrast agent, the
manufacture, use or sale of which is covered by any issued claim or claims of
any unexpired patents within the Technology Rights as defined in Section 1.50.

         1.32 MBI'S MANUFACTURING OBLIGATIONS means MBI's manufacturing and
delivery obligations and covenants in SECTIONS 2.02, 2.03, 2.04(b), (c), (d) AND
(e), 2.06, 2.07, 2.09(c), 2.13 AND 6.02(i) AND (j).

         1.33 MBI TRADEMARKS shall mean the trademarks, including the
registrations and applications therefor listed in APPENDIX 1, together with any
other trademarks, registrations or applications similar to the
"ALBUNEX-Registered Tradmark-" xxxx.

         1.34 NDA shall mean with respect to any formulation or indication of
ALBUNEX a New Drug Application as required to be filed with the FDA.

         1.35 NET SALES shall mean, for each Albunex Product, the aggregate
gross sales in money of that Albunex Product by Mallinckrodt or its Affiliates
to purchasers who are not Affiliates of Mallinckrodt, less the aggregate related
(i) allowances for spoiled, damaged, out-of-date (under SECTION 2.04(e)),
out-of-specification (in respect of specifications required by this Agreement),
recalled or returned vials (if the spoilage, damage, being out-of-date or
out-of-specification, recall or return is due to the fault of MBI during Phases
1 and 2), (ii) trade, quantity and cash discounts and rebates allowed, (iii) all
sales, use and excise taxes and duties paid, and (iv) transportation and
handling charges paid. For any Net Sales in a currency other than United States
dollars, the amount of such Net Sales shall be computed using the average of the
daily exchange rates for the month of sale, as reported by Citibank or any other
exchange rate reporting service or commercial source selected by Mallinckrodt
and approved by MBI (which shall not unreasonably withhold its approval),
provided that Mallinckrodt shall not select another reporting service or
commercial source arbitrarily or for the purpose of gaining an exchange rate
more favorable to it than the exchange rate reported by the Citibank.

         1.36 NYCOMED means Nycomed AS or its successor in interest under the
Nycomed Agreement.

         1.37 NYCOMED AGREEMENT means the License and Cooperative Development
Agreement dated as of December 31, 1987, between MBI and Nycomed AS, as amended
by a Letter Agreement dated as of February 20, 1989, as amended by an Amendment
dated as of June 15, 1989, and as amended by an Amendment No. 3 dated as of
October 24, 1995.




         1.38 NYCOMED LICENSE AMENDMENT means Amendment No. 3 to the License and
Cooperative Development Agreement, entered into by MBI and Nycomed AS as of
October 24, 1995, pursuant to which MBI reacquired substantially all of
Nycomed's ALBUNEX rights in the Nycomed Territory.

         1.39 NYCOMED TERRITORY means the "Territory" as defined in the Nycomed
Agreement and as listed in APPENDIX II to the Nycomed Agreement (as APPENDIX II
has been amended to include India).

         1.40 NYCOMED TERRITORY AMENDMENT means that Amendment No. 1 to ARDA
entered into by Mallinckrodt Medical, Inc. and MBI on November 4, 1996.

         1.41 PHASE 1 for each country means the period beginning on the
effective date of XXXX XX and ending when the Joint Steering Committee shall
determine, on a country-by-country basis, that Mallinckrodt's plant is validated
to perform Fill Operations as that term is defined in SECTION 1.17.

         1.42 PHASE 2 for each country means the period beginning when
Mallinckrodt's plant is validated to perform Fill Operations on a
country-by-country basis and ending when the Steering Committee shall determine,
on a country-by-country basis, that Mallinckrodt's plant is fully validated to
perform all Manufacturing Operations related to the manufacture of OPTISON.

         1.43 PHASE 3 for each country means the period beginning when the Joint
Steering Committee shall determine, on a country-by-country basis, that
Mallinckrodt's plant is fully validated to perform all Manufacturing Operations
related to the manufacture of OPTISON and continuing so long as Mallinckrodt has
a right to manufacture ALBUNEX.

         1.44 PLAINTIFFS shall mean Alliance Pharmaceutical Corp., Xxxxxx
International BV, DuPont Pharmaceuticals, ImaRx Pharmaceutical Corporation,
Nycomed, Sonus Pharmaceuticals, Inc. and Schering AG or any of their Affiliates
or partners.

         1.45 PMA shall mean with respect to any formulation or indication of
ALBUNEX a Pre-Market Approval submission as required to be filed with the FDA.

         1.46 PRODUCT LITERATURE shall mean the product literature for ALBUNEX
developed pursuant to SECTION 2.10.

         1.47 PRODUCT SPECIFICATIONS shall mean the specifications for ALBUNEX
to be supplied by MBI as in effect from time to time as provided in SECTION
2.02.

         1.48 SEPARATE PRODUCT is defined in SECTION 3.02D of the Nycomed
Territory Amendment.

         1.49 SHIONOGI TERRITORY is defined as Japan, The Republic of China
(Taiwan), and the Republic of South Korea, together with all their territories
and possessions.

         1.50 TECHNOLOGY RIGHTS licensed pursuant to this Agreement shall mean
all of the following:

         (a) Those patents and patent applications, if any, in the Territory,
the Additional Territory and the Nycomed Territory, as currently set forth in
APPENDIX 2, together with any patent which may be issued thereunder, and any
divisional, continuation or continuation-in-part applications based thereon, and
any patents resulting from any of said applications and any reissues,
reexaminations or extensions based on any of such patents, and any equivalent
patents and patent applications in countries of the Territory, the Additional
Territory and the Nycomed Territory;

         (b) Any other patents or patent applications in countries of the
Territory, the Additional Territory and the Nycomed Territory, or Know-how
presently owned, controlled or licensed by, being developed or subsequently





developed or acquired (under license or otherwise) by, MBI which relate directly
to ALBUNEX and its manufacture or use; and

         (c) Any FDA applications and approvals held or owned by MBI to which
Mallinckrodt is granted the right to reference pursuant to SECTION 2.01,
including but not limited to INDs, NDAs, PMAs and IDEs.

         1.51 TECHNOLOGY TRANSFER COSTS are defined in SECTION 2.03(a).

         1.52 TECHNOLOGY TRANSFER PERIOD is defined in SECTION 2.03(a).

         1.53 TECHNOLOGY TRANSFER TEAM is defined in SECTION 2.03(a).

         1.54 TERRITORY shall mean all countries, territories and possessions
located in North America, Central America or South America, excluding Greenland.

                                    ARTICLE 2

                             MANUFACTURE OF ALBUNEX

         2.01 REGULATORY MATTERS.

         (a) All applications submitted to the FDA (or Foreign Equivalent
Authorities) relating to ALBUNEX shall be in compliance with all FDA's (or
Foreign Equivalent Authorities') regulations and requirements. All activities
necessary for the commercialization of ALBUNEX under this ARTICLE 2, including
but not limited to pre-clinical and clinical trials, pre-marketing activities
and pre-production activities, shall be conducted in a commercially reasonable
manner and in accordance with accepted industry standards. Clinical trials and
other studies shall be conducted in accordance with applicable FDA (or Foreign
Equivalent Authorities') requirements and procedures, including but not limited
to Good Laboratory Practices and Good Clinical Practices (as those terms are
defined pursuant to industry standards).

         (b) Timing of the preparation and submission of all FDA (or foreign
equivalent) applications shall be as mutually agreed by Mallinckrodt and MBI.
Beginning on the Effective Date, Mallinckrodt will reimburse MBI for fees,
expenses and charges MBI incurs with respect to all FDA or foreign equivalent
applications for cardiac and radiological clinical trials for OPTISON. These
expenses may include, but are not limited to, external fees, internal personnel
costs and CRO costs ("CLINICAL EXPENSES"). Notwithstanding the foregoing, all
Clinical Expenses (i) must be budgeted by MBI and such budgets must be reviewed
and approved in advance by the Joint Steering Committee, (ii) will be billed
monthly and reviewed and paid by Mallinckrodt within 45 days of receipt, and
(iii) are subject to periodic audits by Mallinckrodt similar to the audit right
given to MBI by SECTION 2.14(c). In addition to the budget MBI must prepare
pursuant to SECTION 2.01(b)(i), MBI shall also prepare a 12 month rolling
forecast of Clinical Expenses and submit such forecast to Mallinckrodt no later
than the due date stated in Mallinckrodt's published forecast schedule.

         (c) Notwithstanding the first sentence of SECTION 2.01b) and SECTIONS
2.01(d) AND (e), MBI shall, under the direction of the Joint Steering Committee
and working in conjunction with employees of Mallinckrodt:

                  (1) complete the initial Phase III of the Human Clinical
         Trials for the indication of ALBUNEX specified in APPENDIX 4 (the First
         Generation Product). MBI shall file with the FDA an NDA or PMA
         application relating to the First Generation Product as soon as
         practicable; and [FOR HISTORICAL PURPOSES ONLY]

                  (2) implement or conduct activities necessary to obtain FDA
         approvals for (i) all cardiac indications of OPTISON, and (ii) all
         radiological indications of OPTISON.



         All FDA or foreign equivalent activities under this SECTION 2.01(c) are
subject to the review and approval of the Joint Steering Committee. MBI shall
include Mallinckrodt as an alternative manufacturing site in all relevant
submissions and applications to the FDA. Mallinckrodt shall provide reasonable
assistance to MBI in connection with any application or submission to the FDA by
MBI pursuant to this SECTION 2.01(c), including but not limited to, NDA or PMA
application relating, but not limited to, the First Generation Product.
Mallinckrodt shall have the right to review and approve any application or
submission to the FDA by MBI pursuant to this SECTION 2.01(c), including the NDA
or PMA application or IDE ("INVESTIGATIONAL DEVICE EXEMPTION") for any
formulation of ALBUNEX, prior to submission to the FDA, which approval shall not
be unreasonably withheld or delayed. MBI shall also promptly take appropriate
steps to enable Mallinckrodt to reference or otherwise have the benefit of all
approvals and applications that MBI obtains or submits under this SECTION 2.01.
Notwithstanding the foregoing, Mallinckrodt shall not transfer INDs, NDAs, PMAs
or IDEs related to radiological indications to MBI. Following termination of
this Agreement, Mallinckrodt shall have the continued right to (i) reference the
applications, (ii) file supplemental applications and (iii) use the applications
in any other way that Mallinckrodt deems necessary, and MBI shall have the
obligation to maintain all NDAs, PMAs and IDEs, for so long as Mallinckrodt
continues to make or sell ALBUNEX.

         (d) Mallinckrodt shall be responsible for obtaining all FDA approvals
and conducting any activities related thereto, including but not limited to
pre-clinical and clinical trials, for any indication of ALBUNEX (other than
those which MBI has or undertakes responsibility for pursuant to SECTION
2.01(c)) which Mallinckrodt determines, in its judgment after consultation with
MBI, has a reasonable market opportunity to support the anticipated expenses
associated with obtaining the FDA regulatory approvals for such indication. MBI
shall provide reasonable assistance to Mallinckrodt in connection with any
application or submission to the FDA by Mallinckrodt pursuant to this SECTION
2.01(d). MBI shall have the right to review and approve any application or
submission to the FDA by Mallinckrodt pursuant to this SECTION 2.01(d) prior to
submission to the FDA, which approval shall not be unreasonably withheld or
delayed. Mallinckrodt shall include MBI as an alternative manufacturing site, as
Mallinckrodt deems necessary or as required, in all relevant submissions and
applications to the FDA. At MBI's request, Mallinckrodt shall also promptly take
appropriate steps to enable MBI to reference or otherwise have the benefit of
all approvals and applications that Mallinckrodt obtains or submits under this
SECTION 2.01(d) in respect of all ALBUNEX developed by MBI, or jointly by MBI
and Mallinckrodt, if and when MBI terminates this Agreement pursuant to SECTIONS
14.02(b), (d) OR (f).

         (e) Mallinckrodt shall be responsible for obtaining all approvals of
any Foreign Equivalent Authorities in (i) any country in the Territory other
than the United States of America and (ii) any country in the Additional
Territory and the Nycomed Territory, and conducting any activities related
thereto, including but not limited to preclinical and clinical trials, for any
indication of ALBUNEX which Mallinckrodt determines, in its judgment after
consultation with MBI, has a reasonable market opportunity in such country to
support the anticipated expense associated with obtaining the applicable
regulatory approvals for such indication. Mallinckrodt shall not be required to
obtain any approval which Nycomed has obtained or which it is required to obtain
under the Nycomed Agreement, if (i) Mallinckrodt is permitted by the applicable
Foreign Equivalent Authorities to reference the approval or if it otherwise has
or acquires the benefit of the approval and (ii) where the approval has not yet
been obtained, Nycomed, is proceeding diligently to obtain the approval (as
determined by Mallinckrodt in its judgment, after consultation with MBI). MBI
shall provide reasonable assistance to Mallinckrodt in connection with any
applicable application or submission by Mallinckrodt pursuant to this SECTION
2.01(e). MBI shall have the right to review and approve any application or
submission to Foreign Equivalent Authorities by Mallinckrodt pursuant to this
SECTION 2.01(e) prior to submission to Foreign Equivalent Authorities, which
approval shall not be unreasonably withheld or delayed. Mallinckrodt shall
include MBI as an alternative manufacturing site, as Mallinckrodt deems
necessary or as required, in all relevant submissions and applications to
Foreign Equivalent Authorities. At MBI's request (unless Mallinckrodt is
prohibited by the Nycomed License Amendment), Mallinckrodt shall also promptly
take appropriate steps to enable MBI to reference or otherwise have the benefit
of all approvals that Mallinckrodt obtains or submits under this SECTION 2.01(e)
in respect of all ALBUNEX developed by MBI, or jointly by MBI and Mallinckrodt,
if and when MBI terminates this Agreement pursuant to SECTIONS 14.02(b), (d) OR
(f).

         (f) MBI and Mallinckrodt shall promptly make available to the other all
pharmacological, toxicological, and clinical data and reports, stability data,
and similar information relating to any formulation or indication of



ALBUNEX now or hereafter known to, or possessed, acquired or developed by MBI or
jointly developed by MBI and Mallinckrodt.

         (g) Mallinckrodt shall have the right to participate in, and assist MBI
with, all activities MBI is required to take under SECTION 2.01, including, but
not limited to, preclinical and clinical trials, and to attend and participate
in MBI meetings with the FDA.

         (h) All FDA cardiac and radiological approval activities (as delegated
by the Joint Steering Committee) must be conducted under the supervision of
MBI's Executive Vice President, Xxxxxx Xxxxxxxx, M.D., or such other persons
acceptable to Mallinckrodt. Subject to Xx. Xxxxxxxx'x oversight, all FDA
radiological approval activities (as delegated by the Joint Steering Committee)
shall be under the supervision of Xxxxx Xxxxx, M.D., or such other persons
acceptable to Mallinckrodt. MBI will oversee the regulatory matters related to
the clinical programs MBI is responsible to manage, for so long as MBI is
managing such clinical programs. All other regulatory matters (as delegated by
the Joint Steering Committee) shall be under the direction of Xxxxx X. Xxxxxx of
Mallinckrodt's Medical/Regulatory group or such other person as Mallinckrodt may
designate, however, Mallinckrodt may, at its option, delegate some of these
responsibilities to MBI. If Xx. Xxxxxxxx does not perform the responsibilities
assigned to him by the Joint Steering Committee, then the Committee reserves the
right, at its option, to withdraw such delegation of responsibilities and to
reassign all such approval activities.

         2.02 PRODUCTS. During Phases 1 and 2, the products to be manufactured
by MBI pursuant to this ARTICLE 2 may, from time to time, change as the parties
agree to additional formulations of ALBUNEX to be manufactured by MBI pursuant
to this ARTICLE 2, or as the parties agree to modify the specifications of
ALBUNEX then manufactured by MBI pursuant to this ARTICLE 2 (collectively, the
"SPECIFICATION CHANGES"). MBI and Mallinckrodt may make Specification Changes
from time to time by both parties executing an amendment to APPENDIX 5. APPENDIX
5 contains the current specifications for ALBUNEX to be manufactured pursuant to
this ARTICLE 2.

         2.03 MANUFACTURE. During Phases 1 and 2, and subject to SECTION
2.14(d), MBI shall manufacture ALBUNEX for, or supply ALBUNEX to, Mallinckrodt
under the terms and conditions of this Agreement.

         (a) TECHNOLOGY TRANSFER. Beginning on the Effective Date, MBI and
Mallinckrodt, through the Joint Steering Committee, will develop a plan to
transfer all OPTISON manufacturing to a location controlled by Mallinckrodt as
of an agreed date ("TECHNOLOGY TRANSFER PERIOD"). All costs of establishing the
manufacturing facility, including but not limited to equipment, licensing and
validation shall be borne by Mallinckrodt ("TECHNOLOGY TRANSFER COSTS"). MBI
shall render reasonable assistance to Mallinckrodt in developing Mallinckrodt's
Manufacturing Operations pursuant to the license granted in SECTION 7.01(a). MBI
shall assist Mallinckrodt at the latter's request and expense, including, but
not limited to, reimbursement of MBI for travel expenses, direct labor costs of
MBI personnel, equipment and any other related expenses that are approved
through the budget process of the Joint Steering Committee. The persons from
Mallinckrodt and MBI who are responsible for the transfer of technology from MBI
to Mallinckrodt pursuant to this Section ("TECHNOLOGY TRANSFER TEAM") shall work
closely together to establish reasonable purchasing policies, procedures and
supply agreements with raw material vendors. All costs borne by Mallinckrodt
pursuant to this Section, including those reimbursed to MBI, shall be included
in Technology Transfer Costs and both parties shall keep appropriate records of
such costs.

         (b) MBI MANUFACTURING EXPENSES. Beginning on the Effective Date and
continuing during Phases 1 and 2, Mallinckrodt will reimburse MBI for all
fully-allocated manufacturing expenses ("MBI MANUFACTURING EXPENSES"), including
but not limited to, overhead, depreciation, direct materials, interest and
technology support during the Technology Transfer Period. To qualify for
reimbursement, MBI Manufacturing Expenses must be (i) budgeted by MBI and
reviewed and approved in advance by the Joint Steering Committee, (ii)
determined pursuant to Generally Accepted Accounting Principles ("GAAP"), with
the exception that royalties paid and accelerated depreciation taken by MBI that
would normally be includable in fully-allocated manufacturing expenses
consistent with GAAP will not be reimbursed, (iii) incurred by MBI in
manufacturing OPTISON for Mallinckrodt, and (iv) subject to verification and
periodic audits by Mallinckrodt similar to the right of audit afforded MBI under
SECTION 2.14(c). For purposes of subsection (ii) of this section, the amount of
accelerated depreciation excluded from MBI Manufacturing Expenses shall be equal
to the difference between (1) the accelerated depreciation actually taken by




MBI pursuant to GAAP and (2) the normal depreciation MBI would have taken
pursuant to GAAP assuming MBI had not taken accelerated depreciation. In
addition to the budget prepared by MBI pursuant to SECTION 2.03(B)(I), MBI shall
also prepare a 12 month rolling forecast of MBI Manufacturing Expenses and
submit such forecast to Mallinckrodt no later than the due date stated in
Mallinckrodt's published forecast schedule.

         (c) MBI MANUFACTURING DURING PHASES 1 AND 2; MALLINCKRODT MANUFACTURING
DURING PHASE 3.

                  (1) PHASE 1. During Phase 1, MBI shall continue to manufacture
         OPTISON for Mallinckrodt for countries designated by the Joint Steering
         Committee and subject to the Product Specifications contained in
         APPENDIX 5.

                  (2) PHASE 2. During Phase 2, MBI shall manufacture OPTISON for
         Mallinckrodt for countries designated by the Joint Steering Committee
         and subject to the Product Specifications contained in APPENDIX 5, and
         shall ship it to Mallinckrodt in flex bags. Mallinckrodt shall perform
         Fill Operations.

                  (3) PHASE 3. Xxxxxx Xxxxx 0, Xxxxxxxxxxxx shall manufacture
         OPTISON subject to the limitations in SECTIONS 2.03(c)(1), (c)(2), (d)
         AND 2.05.

                  (4) CONCURRENT PHASES. Notwithstanding the foregoing, the
         phases noted in SECTIONS 2.03(c)(1)-(3) are only mutually exclusive
         within a particular country, as plant validation must be performed and
         market authorization must be secured on a country-by-country basis in
         the Territory, the Additional Territory and the Nycomed Territory.

         (d) MBI RETENTION OF MANUFACTURING RIGHTS. Mallinckrodt shall have the
exclusive right and license to manufacture OPTISON in the Territory, the
Additional Territory and the Nycomed Territory. Notwithstanding the foregoing,
during Phases 1 and 2, MBI shall have the co-exclusive right to manufacture
OPTISON in the Territory, the Additional Territory and the Nycomed Territory,
but such manufacturing right shall only be exercised in order to manufacture for
Mallinckrodt.

         (e) ALBUMIN. At Mallinckrodt's request after it becomes authorized to
manufacture any Albunex Product under SECTIONS 2.03(c)(3) AND 7.01(a), MBI shall
authorize its vendor to use a portion of the vendor's allocation of USP Human
Serum Albumin to MBI to sell to Mallinckrodt for Mallinckrodt to manufacture the
Albunex Product in question in the authorized quantities or to manufacture
ALBUNEX as reasonably required in connection with Mallinckrodt's limited
validated manufacturing.

         2.04 DUTIES OF MBI.  MBI shall:

         (a) Promptly inform Mallinckrodt of any clinical trials reasonably
related to ALBUNEX approval and the results thereof and any problems in starting
production, and subject to the consent of MBI, which consent shall not be
unreasonably withheld or delayed, Mallinckrodt shall have the right to
participate in and assist MBI with any MBI pre-production activities;

         (b) During Phases 1 and 2, establish and maintain, with Mallinckrodt's
assistance, current Good Manufacturing Practices with respect to the
manufacturing of ALBUNEX in compliance with the requirements of the FDA (or
Foreign Equivalent Authorities) as such requirements shall be in effect from
time to time;

         (c) During Phases 1 and 2, ship the quantities of Albunex Products
ordered for the first two calendar quarters of each Forecast that Mallinckrodt
provides to MBI pursuant to SECTION 2.05(b), for delivery during those quarters
in a manner to assure product stability. MBI shall use its best efforts to
deliver the quantities ordered during the particular months of each of those
quarters as specified in the Forecast (but in any event shall deliver the
quantities ordered for each such quarter no later than the last day of the
quarter). In addition, MBI shall use best efforts to deliver amounts ordered
prior to the first Forecast provided by Mallinckrodt;




         (d) During Phases 1 and 2, prepare and deliver to Mallinckrodt a
complete and accurate documentation package (including current Good
Manufacturing Practices documentation and copies of any filings with the FDA or
corresponding foreign agencies in the Territory relating to ALBUNEX or MBI's
facilities or processes used to manufacture ALBUNEX) concerning the development
and manufacturing of ALBUNEX, name Mallinckrodt as an alternative manufacturing
site in any and all appropriate submissions or applications, and update such
package whenever any changes occur;

         (e) During Phases 1 and 2, provide with each shipment of ALBUNEX a
quality certification substantially in the form of APPENDIX 6 certifying, among
other things, the purity and quality of materials, compliance of ALBUNEX with
the Product Specifications and compliance of the manufacturing process with
current Good Manufacturing Practices. MBI shall also certify that all (i) vials
included in the shipment during Phase 1 will have a remaining shelf-life, from
the date of receipt by Mallinckrodt at the designated site for delivery (I.E.,
Mallinckrodt's designated warehouse or such other location as Mallinckrodt shall
designate), at least equal to two-thirds of the shelf-life allowed by the FDA
(or Foreign Equivalent Authorities) before the product is considered out-of-date
and (ii) flex bags of each Albunex Product included in the shipment during Phase
2 will have a remaining shelf-life, from the date of receipt by Mallinckrodt at
the designated site for delivery (I.E., Mallinckrodt's designated warehouse or
such other location as Mallinckrodt shall designate), that allows Mallinckrodt
sufficient time to complete the manufacturing process on the product in the flex
bags;

         (f) Promptly forward to Mallinckrodt all inquiries and complaints it
receives from any person or entity for ALBUNEX and provide Mallinckrodt with any
reasonable assistance requested by Mallinckrodt in connection with complaints,
quality issues or product recalls. Mallinckrodt and MBI shall establish
procedures to provide MBI with the opportunity to obtain direct clinical
responses from Mallinckrodt's customers, in the presence of Mallinckrodt
representatives, regarding their satisfaction with ALBUNEX, understanding of and
training in its use, perception of its clinical utility, and utilization rates.
Mallinckrodt shall provide these opportunities to MBI at a minimum of four times
per year through (among other possible means, and where considered appropriate
by Mallinckrodt) attendance at meetings of Mallinckrodt's medical advisory
boards, presence at Mallinckrodt focus groups and work in the field with
Mallinckrodt sales or marketing representatives. MBI shall not contact
Mallinckrodt's ALBUNEX customers for any reason whatsoever without the prior
written consent of Mallinckrodt, except with respect to (i) products or services
not contemplated by this Agreement, (ii) MBI's contacts with clinicians, experts
and institutions in connection with MBI's preclinical and clinical activities
and (iii) MBI's market research studies authorized under and subject to the
limitations of this SECTION 2.04(f). In order to avoid potential confusion among
customers about Mallinckrodt's exclusive distributorship, MBI shall not be an
exhibitor of ALBUNEX at medical trade shows (for example, meetings of the
American College of Cardiology, American Heart Association, American Institute
of Ultrasound and Medicine, American Society of Echocardiography, and
Radiological Society of North America) or regional hospital/physician-sponsored
meetings. MBI may be an exhibitor of non-ALBUNEX products at these meetings (and
its exhibit may indicate that MBI is the developer of ALBUNEX and manufacturer
of ALBUNEX for Mallinckrodt to the extent MBI still manufactures for
Mallinckrodt), and in any case, MBI may attend these meetings and present
papers. In addition, MBI shall not conduct any advertising or promotional
activities for ALBUNEX to Mallinckrodt customers. Mallinckrodt is responsible
for market research for ALBUNEX, but MBI may undertake limited market research
studies for the sole purpose of identifying desirable additional indications of
ALBUNEX for clinical development. MBI may conduct such studies subject to the
conditions that (i) MBI provides Mallinckrodt with copies of all interim and
final reports and (ii) MBI does not single out known Mallinckrodt customers in
conducting such studies;

         (g) Undertake to keep Mallinckrodt regularly and promptly informed of
any and all significant medical, technical, legal, commercial or other matters
of which it shall gain knowledge in connection with the manufacture or use of
ALBUNEX or in connection with the sale of ALBUNEX in the Territory, the
Additional Territory and the Nycomed Territory. MBI shall meet with Mallinckrodt
periodically, but not less frequently than quarterly, to discuss such matters as
well as any other matters related to ALBUNEX or MBI as reasonably requested by
Mallinckrodt;

         (h) Provide Mallinckrodt (i) copies of all correspondence, reports and
other written documents received by or provided by MBI under the Xxxxxxxxx
License, as amended, and (ii) prompt notice of any claim, controversy or dispute
arising under or related to such License. MBI shall provide Mallinckrodt a copy
of any proposed amendment



or modification to the Xxxxxxxxx License not less than 30 days prior to its
disclosure to or oral discussion with Xxxxxx X. Xxxxxxxxx, M.D., his attorneys
or representatives. In the event that Mallinckrodt notifies MBI within 10
working days after receipt of such copy from MBI that Mallinckrodt, in its
reasonable judgment, determines that the proposed amendment or modification is
detrimental to Mallinckrodt, then MBI shall not amend or modify the Xxxxxxxxx
License without the prior written consent of Mallinckrodt which consent shall
not be unreasonably withheld. MBI shall take all action necessary to preserve
and maintain its rights and license under the Xxxxxxxxx License;

         (i) Except after prior consultation with and the prior written consent
of Mallinckrodt, which consent shall not be unreasonably withheld, not (a) take
official or formal steps or make any public announcement to stop or suspend the
sale and distribution of ALBUNEX, or (b) cancel or cause to be cancelled any
necessary government authorizations regarding the use and distribution of
ALBUNEX, in the Territory, the Additional Territory and the Nycomed Territory;

         (j) Cause members of key management of MBI to devote all necessary time
and effort to the performance of MBI's obligations under this Agreement; and

         (k) Assist Mallinckrodt, upon its reasonable request, in complying with
applicable laws and government regulations affecting the manufacturing, sale,
use and distribution of ALBUNEX and which are not otherwise the responsibility
of MBI as provided herein, provided that Mallinckrodt shall reimburse MBI for
any fees paid to any governmental agency by MBI pursuant to a request under this
SECTION 2.04(k).

         2.05 DUTIES OF MALLINCKRODT.  Mallinckrodt shall:

         (a) Comply with applicable laws and governmental regulations affecting
the sale and distribution of ALBUNEX, with the assistance of MBI, if so
requested by Mallinckrodt;

         (b) During Phases 1 and 2, no later than the first business day of each
calendar quarter, prepare a written four-quarter forecast by month (a
"FORECAST") of Mallinckrodt's purchases of ALBUNEX during that calendar quarter
and the next three calendar quarters. Each Forecast shall specify the quantities
of each Albunex Product during Phase 1 and the quantities of flex bags of
OPTISON during Phase 2 that Mallinckrodt estimates it will purchase each quarter
of the Forecast, by month, and the Forecast for the first two calendar quarters
of each Forecast shall be a firm order for those quarters, for delivery by MBI
during those quarters in accordance with SECTION 2.04(c). In addition, no later
than the first business day of the second and third months of each calendar
quarter, Mallinckrodt shall prepare a written update of its forecast of
purchases of ALBUNEX for the next 12 months. All Forecasts and updates shall be
made in good faith and with due regard to known demand, market conditions and
competitive factors;

         (c) Except as permitted by SECTIONS 2.03 AND 7.01(a), neither
manufacture ALBUNEX nor purchase ALBUNEX from anyone other than MBI; provided
MBI can supply such ALBUNEX as Mallinckrodt may need; and

         (d) Promptly forward to MBI reasonably detailed notice of all
complaints that Mallinckrodt receives from its customers for ALBUNEX.




         2.06 SHIPMENT.

         (a) During Phases 1 and 2, MBI shall ship ALBUNEX in a commercially
reasonable manner to Mallinckrodt sites, warehouses and freight forwarders in
the United States of America and the possessions of the United States of America
within the Territory, and, if commercially reasonable, on an isolated basis
directly to Mallinckrodt customers, all as Mallinckrodt may from time to time
designate. Costs of freight shall be treated in the same way as other MBI
Manufacturing Expenses under SECTION 2.03(b).

         (b) During Phases 1 and 2, MBI shall not transport or ship any ALBUNEX
until (i) MBI and Mallinckrodt shall have each obtained all applicable
approvals, authorizations, and licenses of any required governmental agency or
instrumentality for shipment (including, without limitation, any export or
import licenses or approvals), and (ii) MBI and Mallinckrodt have complied with
all applicable laws and regulations regarding the export, import, shipment, and
labeling of ALBUNEX. Each party shall provide reasonable assistance to the other
party in obtaining the necessary approvals, authorizations and licenses.

         2.07 F.O.B. During Phases 1 and 2, all shipments of ALBUNEX to
Mallinckrodt shall be F.O.B. destination.

         2.08 REJECTION. During Phases 1 and 2, if any shipment of ALBUNEX
manufactured by MBI is found by Mallinckrodt within a reasonable time after
delivery to be defective in material or workmanship or otherwise not in
conformity with the Product Specifications or other requirements hereof,
Mallinckrodt in addition to any other rights which it may have under any
warranties in this Agreement or otherwise, may reject and return such ALBUNEX at
MBI's expense, which goods shall not be replaced without Mallinckrodt's prior
written authorization. Mallinckrodt shall receive a credit against the payment
of MBI Manufacturing Expenses in an amount equal to the cost to Mallinckrodt to
produce the defective goods. Payment of MBI Manufacturing Expenses for the
ALBUNEX shall not constitute acceptance of the products. ALBUNEX rejected by
Mallinckrodt which utilizes any Mallinckrodt name, trade name, trademark,
insignia, symbol, decorative design or evidence of Mallinckrodt's purchase or
inspection shall have the same removed prior to any disposition by MBI. MBI
shall indemnify Mallinckrodt from any claim, loss or damage arising out of any
failure of MBI so to do.

         2.09 MALLINCKRODT TRADEMARKS.

         (a) MBI shall not have any right, title or interest in or to, and shall
not in any respect use, the Mallinckrodt name or logo.

         (b) Mallinckrodt shall have the right to market and sell ALBUNEX (i)
provided by MBI during Phases 1 and 2 , and (ii) manufactured by Mallinckrodt
during Phase 3, under any trademark which Mallinckrodt, in its discretion after
consultation with MBI, deems appropriate.

         (c) During Phase 1, the packaging for ALBUNEX provided by MBI to
Mallinckrodt pursuant to this ARTICLE 2 shall be consistent with the packaging
provided by MBI as of the Effective Date and shall include all product inserts.
Mallinckrodt shall be responsible for all costs of additional packaging or
re-packaging, if any, for shipment to customers.

         (d) All final packaging, including product inserts and labels, shall
make appropriate reference to MBI including when Mallinckrodt manufactures
ALBUNEX.

         2.10 PRODUCT LITERATURE. MBI shall provide to Mallinckrodt technical,
performance and testing information, and any other such information as may
reasonably be requested by Mallinckrodt to assist in the production of sales
material, product inserts, packaging, user instructions or other similar items
for ALBUNEX. Mallinckrodt shall provide MBI with representative samples of
product promotional and sales literature prior to release.




         2.11 INSURANCE.

         (a) Prior to the Launch Date, MBI shall take out and maintain
comprehensive general liability insurance, including products liability
insurance, with minimum limits of $5,000,000 combined for bodily injury and
property damage liabilities. Such insurance shall have both foreign and domestic
coverage with the coverage applying worldwide regardless of where a claim is
filed, except for the countries/territories of Xxxx, Xxxxxxx, Xxxxxxxxx, Xxxx,
Xxxxx Xxxxx and Outer Mongolia. MBI shall have the option to self-insure its
obligations under this Agreement so long as MBI's net worth, as determined in
accordance with generally acceptable accounting principles consistently applied,
exceeds $50,000,000. MBI shall furnish a certificate of insurance or of
self-insurance to Mallinckrodt evidencing the foregoing coverage and required
limits of liability prior to the Launch Date. During Phases 1 and 2, in the
event that any raw materials inventory, work-in-process inventory or finished
goods inventory is destroyed prior to shipment from MBI's facilities,
Mallinckrodt shall be entitled to (i) the replacement of such destroyed
inventory or (ii) reimbursement of the MBI Manufacturing Expenses paid by
Mallinckrodt that are related to such destroyed inventory from any insurance
proceeds received by MBI.

         (b) Prior to the Launch Date, Mallinckrodt shall maintain comprehensive
general liability insurance, including products liability insurance, with
minimum limits of $5,000,000 combined for bodily injury and property damage
liabilities. Such insurance shall have both foreign and domestic coverage with
the coverage applying worldwide regardless of where a claim is filed, except for
the countries/territories of Xxxx, Xxxxxxx, Xxxxxxxxx, Xxxx, Xxxxx Xxxxx and
Outer Mongolia. Mallinckrodt shall have the option to self-insure its
obligations under this Agreement. Mallinckrodt shall furnish a certificate of
insurance or of self-insurance to MBI evidencing the foregoing coverage and
required limits of liability prior to the Launch Date.

         2.12 INSPECTION AND PAYMENT FOR SAMPLES AND RESEARCH AND TRIAL
QUANTITIES.

         (a) During Phases 1 and 2, Mallinckrodt shall have the right during
normal business hours to inspect (i) upon not less than 10 business days prior
notice, MBI's business and financial records relating to the manufacture, use or
sale of ALBUNEX in the Territory, the Additional Territory and the Nycomed
Territory or any other obligation of MBI under this Agreement, and (ii) upon not
less than 2 business days prior notice, MBI's facilities and operations, and any
other scientific data and information relating to ALBUNEX, or the manufacture,
use or sale of ALBUNEX in the Territory, the Additional Territory and the
Nycomed Territory, in order to insure that ALBUNEX is being manufactured in
compliance with current Good Manufacturing Practices and that the other terms
and conditions of this Agreement are being met, provided, however, Mallinckrodt
shall have the right to conduct such inspection without prior notice to MBI no
more frequently than once per calendar quarter. Mallinckrodt's right of
inspection shall not extend to MBI's business and financial records relating to
the Nycomed Agreement.

         (b) During Phases 1 and 2, Mallinckrodt may, but shall not be obligated
to, sample any shipment of ALBUNEX to verify the accuracy of MBI's certificate
described in SECTION 2.04(e). During Phases 1, 2 and 3, in connection with the
marketing and promotion of ALBUNEX, Mallinckrodt may, but shall not be obligated
to, provide samples of ALBUNEX to customers or potential customers free of
charge.

         (c) Mallinckrodt shall be obligated to pay MBI for any sample of
ALBUNEX used for the purposes described in SECTION 2.12(b) on the same basis as
any other ALBUNEX sold to Mallinckrodt under this Agreement.

         (d) Mallinckrodt may provide MBI with ALBUNEX during Phase 3 as
approved by and on such terms as the Joint Steering Committee shall determine.

         2.13 ANALYSIS, QUALITY CONTROL, TESTING AND RELEASE. During Phase 1,
MBI shall perform the final quality control testing, further processing,
labeling of final containers, and final release on




ALBUNEX. During Phase 2, MBI shall perform the final quality control testing,
further processing, and labeling of flex bags of ALBUNEX. Xxxxxx Xxxxx 0,
Xxxxxxxxxxxx shall perform labeling of final containers and final release on
ALBUNEX. Xxxxxx Xxxxx 0, Xxxxxxxxxxxx shall perform the final quality control
testing, further processing, labeling of final containers, and final release on
ALBUNEX.

         2.14 REPORTS; PRICE/ROYALTY; AUDIT RIGHTS; FOREIGN CURRENCY; INTEREST
ON LATE PAYMENTS.

         (a) Mallinckrodt shall deliver to MBI, within 45 days after the start
of each calendar quarter, a true and accurate report of the Average Selling
Price of each Albunex Product sold during the preceding calendar quarter. This
report shall include all relevant details, including gross sales, all
adjustments used to derive Net Sales and number of vials shipped to purchasers.
In addition, Mallinckrodt shall provide MBI with monthly sales reports no later
than 30 days after the end of each month. Each monthly sales report shall
include, by Albunex Product, (i) the total number of vials sold by package
configuration, and (ii) the amount of all Net Sales by month.

         (b) With respect to any calendar quarter, Mallinckrodt shall pay to MBI
a royalty equal to the amount determined by multiplying the number of vials of
each MBI Licensed Product sold by Mallinckrodt by 20% of the Average Selling
Price for such MBI Licensed Product during the calendar quarter in which the
Product was sold. Mallinckrodt's royalty obligation under this SECTION 2.14(b)
shall apply only to those MBI Licensed Products manufactured by MBI or
Mallinckrodt under the terms of this Agreement (XXXX XX), and shall continue
through the expiration date of the last patent relating to ALBUNEX, on a
country-by-country basis. Royalty payments shall be made in United States
dollars and shall be due no later than 45 days following the end of the calendar
quarter in which the sale was made. In the event that Mallinckrodt does not
receive distributor sales data within 45 days of the end of the quarter, then
Mallinckrodt will pay an estimated royalty based on its historical experience
and will include an adjustment in the following quarterly payment to true-up
such estimate. Mallinckrodt and MBI have agreed upon an appropriate calculation
to determine the amount of royalties owed by Mallinckrodt to MBI for the
transition period beginning March 1, 1999 and ending June 30, 1999.

         (c) Mallinckrodt shall keep full, true and accurate books of account
containing all particulars which may be necessary for the purpose of determining
the amount to be paid under this Agreement. Mallinckrodt agrees, at the request
of MBI and at MBI's expense, to permit an independent certified accountant
selected by MBI and reasonably acceptable to Mallinckrodt, access upon at least
10 business days prior notice and no more than once a calendar quarter to such
books of account for the purpose of verifying the reports described in SECTIONS
2.03(a) AND 2.14(a). Such accountant shall not be entitled to disclose any
information relating to the business of Mallinckrodt except that which should be
properly contained in any statement required in SECTIONS 2.03(a) AND 2.14(a).

         (d) Mallinckrodt shall inform MBI of Mallinckrodt's proposed initial
pricing of each new Albunex Product. If the proposed initial price of any new
Albunex Product is less than $55.00, or if the Average Selling Price of any
existing Albunex Product is less than $55.00 for two consecutive calendar
quarters, Mallinckrodt may (i) if the Albunex Product in question is a new
product, cancel or postpone launch of the commercial sale of that product, and
(ii) if the Albunex Product in question is an existing product, cancel or
suspend the commercial sale of that Albunex Product (in either case without
being in breach or default under this Agreement or losing exclusivity as a
result).

         (e) If any payment due under this Agreement is not paid in full when
due, interest shall accrue on the unpaid amount from the date due until paid at
a fluctuating rate equal at all times to the rate 2.0% above the rate the First
National Bank of Chicago/BankOne publishes or announces as its prime or
equivalent rate of interest.

         (f) Only one royalty shall be payable hereunder as to any particular
MBI Licensed Product sold by Mallinckrodt or its Affiliates.




         2.15 FUNDING OF FURTHER ALBUNEX DEVELOPMENT.

         (a) Mallinckrodt shall pay MBI $20 million for the further development
of ALBUNEX, as follows:

                  (1) $1 million on the first day of each of the four quarters
         (each of three calendar months), beginning with the quarter starting on
         the first day of the first calendar month beginning after the effective
         date of ARDA;

                  (2) $1.25 million on the first day of each of the next eight
         quarters, beginning with the quarter starting on the first anniversary
         of the first day of the first calendar month beginning after the
         effective date of ARDA; and

                  (3) $1.5 million on the first day of each of the next four
         quarters, beginning with the quarter starting on the third anniversary
         of the first day of the first calendar month beginning after the
         effective date of ARDA.

Consistent with the guiding principles described in SECTION 2.16(b), the Joint
Steering Committee, by a unanimous vote of its members and written notice to
Mallinckrodt, may direct the acceleration of these payments at any time by
increasing the amount of the next payment or payments that Mallinckrodt is
required to make and reducing the last payment that Mallinckrodt is otherwise
required to make by the same amount as the aggregate increase (and if the
aggregate increase exceeds the amount of the last payment that Mallinckrodt is
required to make, reducing the amount of each prior payment in turn, beginning
with the next-to-last payment that Mallinckrodt is required to make and
proceeding in reverse chronological order, until the aggregate reductions equal
the aggregate increase). Payment shall be made by wire transfer to an account
designated by MBI. Mallinckrodt representatives on the Joint Steering Committee
shall not be required to (but may) vote in favor of any acceleration proposed by
the MBI representatives on the Committee.

         (b) Mallinckrodt shall fund the clinical trials and research to be
performed pursuant to SECTION 2.01, subject to the review and approval of the
Joint Steering Committee. Mallinckrodt shall not provide any additional funds to
MBI over and above the $20 million previously paid pursuant to SECTION 2.15(a)
until MBI has included the new funds in a budget and such budgets have been
approved by the Joint Steering Committee.

         (c) MBI shall keep true and accurate records of its expenditures
described in SECTIONS 2.01, 2.03 AND 2.15(a) AND (b). Mallinckrodt shall have a
right of audit regarding these expenditures similar in frequency and scope to
the right of audit afforded MBI by SECTION 2.14(c).

         (d) MBI acknowledges that Mallinckrodt has previously made all of the
payments that Mallinckrodt was required to make under SECTION 2.15(a).
Mallinckrodt acknowledges that MBI has: (i) exhausted all amounts previously
paid by Mallinckrodt under SECTION 2.15(a) and (ii) properly accounted for the
expenditure of the amounts paid under SECTION 2.15(a) to Mallinckrodt's
satisfaction.

         2.16 JOINT STEERING COMMITTEE. MBI and Mallinckrodt shall establish a
joint steering committee (the "JOINT STEERING COMMITTEE"), which shall have
three functions:

                  (1) to review, on a quarterly basis (or more frequently as
         requested by either party), clinical trial programs relating to the
         development and regulatory approval of ALBUNEX, with a particular
         emphasis on reviewing the budgeting, design, implementation and
         expenditures related to clinical trials and any Investigational Device
         Exemption or Investigational New Drug applications to the FDA
         (including related amendments and other ancillary filings) and
         corresponding filings with Foreign Equivalent Authorities ("CLINICAL
         REVIEW");




                  (2) to review, on a quarterly basis (or more frequently as
         requested by either party), the development and implementation of
         marketing plans, strategies and budgets in the Territory, the
         Additional Territory and the Nycomed Territory ("MARKETING REVIEW");
         and

                  (3) during Phases 1 and 2 only, to review, on a quarterly
         basis (or more frequently as requested by either party), the operation,
         development and implementation of Mallinckrodt's Manufacturing
         Operations and to review budgets and expenditures related to MBI
         Manufacturing Expenses ("MANUFACTURING REVIEW").

         In respect of Clinical Review, the Committee is intended to provide a
mechanism to enable the parties to share their expertise and concerns relating
to clinical programs, regulatory affairs and cost-effectiveness and
reimbursement issues, and shall have significant authority and flexibility in
determining the staffing, task assignments, objectives, number, design and other
features of clinical trials, with a view to maximizing the return on development
costs and expediting commercialization. In respect of Marketing Review, the
Committee is intended to provide a mechanism to enable the parties, consistent
with the other provisions of this Agreement, to gather and share marketing and
other information that will enable them to plan and implement marketing
strategies designed to accomplish their mutual goals of (i) obtaining market
leadership and maximizing distribution of ALBUNEX in the Territory, the
Additional Territory and the Nycomed Territory, and in particular countries
within each territory, and (ii) obtaining a superior return on their respective
investments while balancing the expenses of marketing, advertising, selling and
distribution against expected increases in sales and profits. In this regard,
the parties recognize that market conditions in each territory, and in
particular countries within each territory, are constantly changing, and that
Marketing Review is intended to be a dynamic and continuing process. In respect
of Manufacturing Review, the Committee is intended to provide a mechanism to
monitor the progress and address any needs that may arise during the Technology
Transfer Period and to ensure the cost effectiveness of MBI Manufacturing
Expenses during Phases 1 and 2.

         The Committee shall consist of whatever number of MBI representatives
and Mallinckrodt representatives are required to properly execute the duties of
the Committee. Regardless of the number of members of the Committee, MBI and
Mallinckrodt shall each have three votes on all matters, with the exception of
budget matters. On budget matters, Mallinckrodt shall have four votes and MBI
shall have three votes. Four votes are sufficient to approve any action of the
Committee. The parties shall give prompt written notice to one another of any
changes in their respective representatives on the Committee, and
representatives may designate an alternate representative to act in their
capacity during their absence.

         The Committee has formerly adopted procedures to govern its activities
substantially in the form described in APPENDIX 7. At the earliest possible
date, the Committee shall prepare a charter to formalize and govern the duties,
responsibilities and activities of the Committee and its members (the
"CHARTER"). Until such time as the Charter is adopted, the procedures in
APPENDIX 7 shall govern the Committee's activities. The Charter will be based on
the procedures currently included in APPENDIX 7, but will be a living document
separate and apart from this Agreement and consistent with its principles, and
such Charter may be amended or modified from time to time at the Committee's
discretion.

         (a) The Joint Steering Committee shall have the broad authority to
specify the clinical trials and other activities required to be performed under
SECTION 2.01(c), and MBI shall not make any expenditure under that Section
without the Committee's prior authorization. In connection with the quarterly
review process performed pursuant to SECTION 2.16(1), wherein the Joint Steering
Committee reviews and assesses the progress of the clinical trials, the
Committee shall have the right to amend or modify previously approved budgets or
to completely




withdraw funding for any clinical trials, if it appears to the Committee that
such clinical trials are likely to result in an unfavorable outcome.

         (b) The Joint Steering Committee's decisions shall be guided by the
following principles, emphasizing both quality and speed:

                  (1) it is very important to bring a product to market in the
         shortest possible time consistent with the prevailing regulatory
         climate (but the quality of the clinical program, including clinical
         utility and cost-effectiveness, is equally important);

                  (2) it is important that clinical studies are conducted and
         their results presented in a thorough, well-organized and professional
         manner;

                  (3) the Committee's decisions should be made with a sense of
         urgency consistent with the prevailing regulatory climate, applying the
         standard of a prudent businessman who has a lead over his competitors
         and wants to maintain that lead, and with a view towards operating by
         consensus and in a manner intended to emphasize partnership and a
         commonality of interests; and

                  (4) it is important to achieve the broadest possible market
         penetration in each significant market at the earliest possible date,
         consistent with a responsibly conducted product launch. However, the
         cost of market penetration must be balanced against potential near term
         and long term sales and revenues.

         (c) In the event of a dispute over a matter for which the parties have
an equal number of votes, MBI and Mallinckrodt shall attempt to resolve the
dispute informally in light of the guiding principles in SECTION 2.16(b). If MBI
and Mallinckrodt are unable to resolve the dispute, they shall each designate as
a referee an unaffiliated person with senior-level credentials in the medical,
scientific, clinical and administrative areas relevant to the Committee's
activities, and the two referees shall attempt to resolve the dispute. If they
are unable to do so within a reasonable period, they shall jointly appoint a
third person with similar qualifications to act as an arbitrator. In reaching a
decision, the arbitrator shall take into account such matters as he considers
appropriate, and may require the parties to provide a written statement or oral
presentation in support of their respective positions. The arbitrator's decision
shall be binding on MBI and Mallinckrodt. During the pendency of the dispute,
Mallinckrodt shall not withhold (and neither the referees nor any arbitrator
appointed by them shall have authority to excuse or delay) any payments due from
Mallinckrodt to MBI under this Agreement. MBI and Mallinckrodt shall each pay
the fees and expenses of its own referee and one-half of the fees and expenses
of any arbitrator that the two referees appoint.

         (d) In the event of a dispute over a matter relating to Marketing
Review that cannot be resolved by the Committee, MBI and Mallinckrodt shall
attempt to resolve the dispute informally in light of the guiding principles in
SECTION 2.16(b). If MBI and Mallinckrodt are unable to resolve the dispute, the
dispute shall not be referred to referees or subject to arbitration (under
Section 2.16(c), Section 12.01 or otherwise) and Mallinckrodt's position shall
be controlling (as long as it does not involve any cash expenditure by MBI).

         (e) The authority of the Joint Steering Committee in respect of
Clinical Review shall continue indefinitely but shall cease upon 30 days' prior
written notice from Mallinckrodt or MBI to the other given at any time after the
latest of: (i) the date that ALBUNEX is approved for sale in both the United
States and in the European Union for an intravenous myocardial perfusion
indication; (ii) the date that ALBUNEX is approved for sale in the United States
and in the European Union for a radiology indication or (iii) the date that
Mallinckrodt ceases to be the exclusive distributor, sales representative and
licensee for ALBUNEX sold in and throughout any territory (except for
sub-distributors appointed by Mallinckrodt or an Affiliate of Mallinckrodt). The
authority of the Joint Steering Committee in respect of Marketing Review shall
continue indefinitely but shall cease in respect of Marketing Review for any
territory on the date that Mallinckrodt ceases to be the exclusive distributor
and sales representative for ALBUNEX sold in and throughout that territory
(except for sub-distributors appointed by Mallinckrodt or an Affiliate of
Mallinckrodt). The authority of the Joint Steering Committee in respect of




Manufacturing Review shall cease, on a territory by territory basis, at the time
the manufacturing for such territory enters Phase 3.

         2.17 ADDITIONAL PAYMENTS. Mallinckrodt shall make the following
payments to MBI:

         (a) $3 million on the date when the Nycomed Territory Amendment becomes
effective, and MBI acknowledges that Mallinckrodt has previously made this
payment; and

         (b) $4 million upon the first commercial sale of ALBUNEX in Germany by
Mallinckrodt or an Affiliate of Mallinckrodt for an approved intravenous
myocardial perfusion indication, and in this regard, Mallinckrodt shall take all
necessary and appropriate steps to achieve approval at the earliest possible
date for the sale in Germany of ALBUNEX for such an indication; provided,
however, that Mallinckrodt retains the right, based on commercially reasonable
factors, to determine, in a commercially reasonable manner, the appropriate
launch date for ALBUNEX in Germany.

                                    ARTICLE 3

                               DISTRIBUTION RIGHTS

         3.01 APPOINTMENT AS DISTRIBUTOR AND SALES REPRESENTATIVE. MBI hereby
appoints Mallinckrodt, and Mallinckrodt hereby accepts appointment as the
exclusive distributor and exclusive sales representative for ALBUNEX to be sold
in and throughout the Territory, the Additional Territory and the Nycomed
Territory. Subject to SECTION 14.03, the appointment pursuant to this SECTION
3.01 is non-cancelable during the term of this Agreement.

         3.02 NYCOMED TERRITORY AMENDMENT.

         3.02A IDENTIFICATION. This Section constitutes the "Nycomed Territory
Amendment" as that term is defined in SECTION 1.40. As of the November 4, 1996,
Mallinckrodt's appointment in SECTION 3.01 as the exclusive distributor and
exclusive sales representative for ALBUNEX to be sold in and throughout the
Nycomed Territory, and all of the other provisions relating to the parties'
respective rights and duties in the Nycomed Territory, were effective.

         3.02B UPFRONT PAYMENT. Pursuant to SECTION 3.1 of the Nycomed License
Amendment, MBI paid $700,000 to Nycomed upon the parties' execution of the
Nycomed License Amendment, and pursuant to SECTION 3.2 of the Nycomed License
Amendment, MBI paid an additional $2 million to Nycomed on or about March 31,
1996. On December 17, 1996, Mallinckrodt paid $2.7 million to MBI by wire
transfer.

         3.02C MILESTONE PAYMENTS. SECTIONS 3.02C(a) AND (b) provide that
Mallinckrodt shall pay to MBI "$3 million on the date when the Nycomed Territory
Amendment [I.E., this Amendment] becomes effective" and "$4 million upon the
first commercial sale of ALBUNEX in Germany by Mallinckrodt ... for an approved
intravenous myocardial perfusion indication ...." SECTION 3.3 of the Nycomed
License Amendment provides that MBI shall pay to Nycomed "45 % of any amounts in
excess of $2,700,000 received by MBI in either up-front, milestone or similar
payments from third parties" in consideration for MBI's grant of ALBUNEX rights
in the Nycomed Territory. The payments that Mallinckrodt is required to make
pursuant to SECTIONS 3.02C(a) AND (b) will constitute "amounts in excess of
$2,700,000" for purposes of SECTION 3.3 of the Nycomed License Amendment.
Accordingly:

                  (a) on December 17, 1996, Mallinckrodt shall pay $3 million to
         MBI by wire transfer, pursuant to SECTION 2.17(a);

                  (b) on or before January 16, 1997, Mallinckrodt shall pay
         $1.35 million (or 45% of $3 million) to Nycomed in satisfaction of
         Nycomed's claims under SECTION 3.3 of the Nycomed License Amendment in
         respect of Mallinckrodt's payment of $3 million to MBI pursuant to
         SECTION 2.17(a);




                  (c) within five days after the date of the first commercial
         sale of ALBUNEX in Germany by Mallinckrodt or an Affiliate of
         Mallinckrodt which is specifically approved for an intravenous
         myocardial perfusion indication, Mallinckrodt shall pay $4 million to
         MBI pursuant to SECTION 2.17(b); and

                  (d) within 30 days after the date of the first commercial sale
         of ALBUNEX in Germany by Mallinckrodt or an Affiliate of Mallinckrodt
         for an approved intravenous myocardial perfusion indication,
         Mallinckrodt shall pay $1.8 million (or 45% of $4 million) to Nycomed
         in satisfaction of Nycomed's claims under SECTION 3.3 of the Nycomed
         License Amendment in respect of Mallinckrodt's payment of $4 million to
         MBI pursuant to SECTION 2.17(b); provided, however, that Mallinckrodt
         retains the right, based on commercially reasonable factors, to
         determine the appropriate launch date for ALBUNEX in Germany.

MBI acknowledges that Mallinckrodt has previously made the payments that
Mallinckrodt was required to make under SECTIONS 3.02C(a) AND (b).

         3.02D ROYALTIES TO NYCOMED. SECTION 3.5 of the Nycomed License
Amendment provides that, for the remaining term of the Nycomed License
Amendment, MBI shall pay Nycomed a royalty of 2.5% on the first $30 million of
the Net Selling Price of Licensed Products sold in the Nycomed Territory each
year and 3.5% on the Net Selling Price of Licensed Products on sales in excess
of $30 million each year (as "Net Selling Price" is defined in SECTION 3.5.1 of
the Nycomed License Amendment and "Licensed Product" is defined in SECTION I.B
of the Nycomed Agreement). SECTION 3.5 of the Nycomed License Amendment also
provides that "[a] separate royalty shall be payable in respect of each Licensed
Product." For purposes of this Amendment, the following products shall be
considered separate Licensed Products ("SEPARATE PRODUCTS"): (i) Infoson; (ii)
the First Generation Product and any substantially similar formulation; (iii) FS
and any substantially similar formulation; and (iv) any other formulation of
ALBUNEX which is not substantially similar to Infoson, the First Generation
Product or FS. Mallinckrodt shall pay to MBI, for payment to Nycomed, the
following royalty on Net Sales of ALBUNEX in the Nycomed Territory:

                  (a) a royalty of 1.5% (= 2.5% x 0.60) on the first $30 million
         of Net Sales of each Separate Product each calendar year; and

                  (b) a royalty of 2.1% (= 3.5% x 0.60) on Net Sales of each
         Separate Product each calendar year in excess of $30 million.

Royalties payable under this SECTION 3.02D shall be paid pursuant to the
procedures in SECTION 2.14.

         3.02E SHIPMENT. During Phase 1, MBI shall ship ALBUNEX for sale in the
Nycomed Territory in a commercially reasonable manner from MBI's warehouse to
any one site in the Nycomed Territory designated by Mallinckrodt. Costs of
shipping and labeling shall be treated in the same way as other MBI
Manufacturing Expenses under SECTION 2.03(b). Title to the product shipped shall
pass to Mallinckrodt upon shipment from MBI's warehouse, however, Mallinckrodt
retains the right to reject any shipment after receipt that does not conform to
Product Specifications.

         3.02F    SURVIVAL OF ROYALTY AND OTHER OBLIGATIONS.

         (a) If MBI exercises its rights under SECTIONS 9.01(a) OR (b):

                  (l) Mallinckrodt's royalty obligation to MBI pursuant to
         SECTION 3.02D shall be considered modified to provide for a payment to
         MBI, in respect of each Separate Product, of a percentage of the
         royalty due to Nycomed under Section 3.5 of the Nycomed License
         Amendment in respect of that Separate Product. This percentage shall be
         equal to the product of (i) the quotient obtained by dividing
         Mallinckrodt's Net Sales of the Separate Product by the Aggregate Net
         Sales of the Separate Product multiplied by (ii) 100. The parties shall
         report their respective portions of the Aggregate Net Sales of each
         Separate Product to one another for purposes of calculating the
         applicable percentage under this SECTION 3.02F(a)(1).




                  (2) Mallinckrodt's royalty obligation to MBI pursuant to
         SECTION 4.03(c), shall survive and continue, for as long as a royalty
         remains payable by MBI under Section 5.2 of the Xxxxxxxxx License,
         except that Mallinckrodt's payments to MBI shall be the entire amount
         of the royalty due to Xx. Xxxxxxxxx under SECTION 5.2(b) of the
         Xxxxxxxxx License in respect of Licensed Products (as "Licensed
         Products" defined in SECTION 1.2 of the Xxxxxxxxx License) manufactured
         and sold by Mallinckrodt in the Nycomed Territory.

         (b) If this Agreement terminates following notice from Mallinckrodt
pursuant to SECTIONS 14.02(b), (c), OR (e), then in addition to the other
effects described in SECTION 14.03:

                  (1) Mallinckrodt's royalty obligation to MBI pursuant to
         SECTION 3.02D shall survive and continue, for as long as a royalty
         remains payable by MBI under Section 3.5 of the Nycomed License
         Amendment, except that until the latest of (i) the fifth anniversary of
         the date that the FDA approves an intravenous myocardial perfusion
         indication of ALBUNEX for sale in the United States or (ii) termination
         of this Agreement, the royalty payable by Mallinckrodt on Net Sales of
         ALBUNEX in the Nycomed Territory shall be:

                           (a) 1.5% on the first $30 million of Net Sales of
                  each Separate Product for each calendar year; and

                           (b) 2.1% on Net Sales of each Separate Product for
                  each calendar year in excess of $30 million.

         After such date, Mallinckrodt shall pay MBI a percentage of the royalty
         due to Nycomed under Section 3.5 of the Nycomed License Amendment in
         respect of each Separate Product. For each Separate Product, this
         percentage shall be equal to the product of (i) the quotient obtained
         by dividing Mallinckrodt's Net Sales of the Separate Product by the
         Aggregate Net Sales of the Separate Product multiplied by (ii) 100. The
         parties shall report their respective portions of the Aggregate Net
         Sales of each Separate Product to one another for purposes of
         calculating the applicable percentage under this Section.

                  (2) Mallinckrodt's royalty obligation to MBI pursuant to
         SECTION 4.03(c), shall survive and continue, for as long as a royalty
         remains payable by MBI under Section 5.2 of the Xxxxxxxxx License,
         except that Mallinckrodt's payments to MBI shall be the entire amount
         of the royalty due to Xx. Xxxxxxxxx under 5.2(b) of the Xxxxxxxxx
         License in respect of Licensed Products (as "Licensed Products" defined
         in Section 1.2 of the Xxxxxxxxx License) manufactured and sold by
         Mallinckrodt in the Nycomed Territory.

         (c) If this Agreement terminates following notice from MBI pursuant to
Sections 14.02(b), (d), OR (f), then in addition to the other effects described
in SECTION 14.03:

                  (1) Mallinckrodt's royalty obligation to MBI pursuant to
         SECTION 3.02D shall survive and continue, for as long as a royalty
         remains payable by MBI under Section 3.5 of the Nycomed License
         Amendment, except that Mallinckrodt's payments to MBI shall be a
         percentage of the royalty due to Nycomed under Section 3.5 of the
         Nycomed License Amendment in respect of each Separate Product. For each
         Separate Product, this percentage shall be equal to the product of (i)
         the quotient obtained by dividing Mallinckrodt's Net Sales of the
         Separate Product by the Aggregate Net Sales of the Separate Product
         multiplied by (ii) 100. The parties shall report their respective
         portions of the Aggregate Net Sales of each Separate Product to one
         another for purposes of calculating the applicable percentage under
         this Section.

                  (2) Mallinckrodt's royalty obligation to MBI pursuant to
         SECTION 4.03(c) shall survive and continue, for as long as a royalty
         remains payable by MBI under Section 5.2 of the Xxxxxxxxx License,
         except that Mallinckrodt's payments to MBI shall be the entire amount
         of the royalty due to Xx. Xxxxxxxxx under 5.2(b) of the Xxxxxxxxx
         License in respect of Licensed Products (as "Licensed Products" is
         defined in Section 1.2 of the Xxxxxxxxx License) manufactured and sold
         by Mallinckrodt in the Nycomed Territory.




         3.02G MAINTENANCE OF NYCOMED LICENSE AMENDMENT. MBI shall take such
actions as are necessary and advisable to maintain the Nycomed License Amendment
in force, including, but not limited to, paying all royalties and other sums due
to Nycomed. MBI shall give Mallinckrodt 10 business days' prior written notice
of any proposed amendment or modification of the Nycomed License Amendment and
shall not enter into any such amendment or modification that adversely affects
Mallinckrodt without Mallinckrodt's prior written consent.

         3.02H EXCLUSIVITY IN NYCOMED TERRITORY. (FOR HISTORICAL PURPOSES ONLY.)

         (a) Beginning on the date that MBI enters into the Nycomed License
Amendment and continuing for a period of one year from the date that MBI gives
Mallinckrodt written notice that MBI has done so, MBI shall not (i) directly, or
through an Affiliate of MBI, sell ALBUNEX for its own account in the Nycomed
Territory or (ii) license any third party to sell or distribute ALBUNEX in the
Nycomed Territory.

         (b) In no event shall Mallinckrodt negotiate with Nycomed for a
sublicense of any kind under the Nycomed Agreement or for an assignment of all
or any part of Nycomed's interest under the Nycomed Agreement.

         3.03 DUTIES OF MBI. In addition to its other duties hereunder, MBI
shall:

         (a) Use reasonable efforts to assist in Mallinckrodt's promotion of
ALBUNEX throughout the Territory, the Additional Territory and the Nycomed
Territory in support of Mallinckrodt's respective marketing plans for those
territories;

         (b) Provide such technical assistance to Mallinckrodt in the marketing,
sale and distribution of ALBUNEX in the Territory, the Additional Territory and
the Nycomed Territory, as Mallinckrodt requests, including the dedication at any
given time of up to a maximum of 10 MBI employees as technical sales
specialists. Each such request shall specify the nature and extent of the
assistance required, and shall be reasonable in respect of the type of
assistance requested and the resources, time and cost required to render that
assistance. MBI shall advise Mallinckrodt if MBI considers Mallinckrodt's
request unreasonable, and the parties shall attempt in good faith to resolve
their differences. Notwithstanding anything to the contrary in this Agreement,
MBI's expenses under this Section shall not be reimbursed by Mallinckrodt;

         (c) Provide assistance as reasonably requested by Mallinckrodt with
respect to customer service activities including technical support services and
sales administrative support services; and

         (d) Provide support and assistance in establishing efficient
communications between Mallinckrodt and MBI for shipping information, invoicing,
complaints and customer relations information including support of computer
communications systems for information flow.



         3.04 DUTIES OF MALLINCKRODT. In addition to its other duties hereunder,
Mallinckrodt shall:

         (a) Treat OPTISON as an important contrast product in the same manner
Mallinckrodt traditionally markets its important contrast line of products for
purposes of Mallinckrodt's premarketing, marketing, sales and distribution
efforts and expenditures. Mallinckrodt's marketing, sales and distribution
efforts regarding OPTISON shall place emphasis on all relevant clinical
indications of OPTISON, market segments and appropriate geographical regions in
the Territory, the Additional Territory and the Nycomed Territory, and the
recruitment of medical and scientific opinion leaders. Notwithstanding the
immediately preceding sentence, MBI and Mallinckrodt acknowledge that
Mallinckrodt has fulfilled this duty to date. In carrying out its future
obligations under this paragraph, Mallinckrodt has the right to balance such
future investments and efforts against historical and potential product
profitability and, in so doing, reach any commercially reasonable judgment it
deems necessary regarding its marketing, sales and distribution efforts and
expenditures relative to OPTISON;

         (b) Subject to the provisions of SECTION 3.04(a), provide an adequate
sales organization and facilities to assure adequate sales representation,
prompt handling of inquiries and orders, and attention to customer service
requirements for OPTISON in support of the activities described in SECTION
3.04(a);

         (c) Comply with applicable laws and governmental regulations affecting
the sale and distribution of OPTISON in the Territory, the Additional Territory
and the Nycomed Territory, with the assistance of MBI, if so requested by
Mallinckrodt;

         (d) Provide support and assistance in establishing efficient
communications between Mallinckrodt and MBI for shipping information, invoicing,
complaints and customer relations information including support of computer
communication systems for information flow;

         (e) Provide sales order entry and technical assistance including
customer service; and

         (f) Provide such technical assistance to MBI in the development of
OPTISON as MBI requests. Each such request shall specify the nature and extent
of the assistance required, and shall be reasonable in respect of the type of
assistance requested and the resources, time and cost required to render that
assistance. Mallinckrodt shall advise MBI if Mallinckrodt considers MBI's
request unreasonable, and the parties shall attempt in good faith to resolve
their differences.

         3.05 MARKETING.

         (a) Promptly after Mallinckrodt's annual marketing and sales plan for
ALBUNEX is approved internally each year, Mallinckrodt shall provide MBI with an
appropriately detailed summary of the plan for MBI's internal use.

         (b) Mallinckrodt shall, from time to time and in its sole discretion,
establish the prices at which ALBUNEX shall be sold by it or its Affiliates.
Terms of all sales, including but not limited to credit, billing and shipments,
shall be established by Mallinckrodt in its sole discretion.




                                    ARTICLE 4

                                    PAYMENTS

         4.01 MILESTONE PAYMENTS. Subject to the limitations, terms and
conditions contained in this Agreement, Mallinckrodt shall pay to MBI (i) the
sum of $6,000,000 United States dollars by cashier's check or by wire transfer
in immediately available funds upon execution of this Agreement and (ii) the
following amounts by cashiers' check or by wire transfer in immediately
available funds if, and only if, the particular stated milestone is achieved by
MBI:

         (a) PHASE III OF HUMAN CLINICAL TRIALS. $3,333,000 due in 4 successive
quarterly installments of $833,250 each, with the first quarterly installment
payable 30 days after the date MBI provides Mallinckrodt written notice
accompanied by supporting documentation that MBI has commenced the initial Phase
III of the first Human Clinical Trials for ALBUNEX with an indication as set
forth in APPENDIX 4;

         (b) FDA APPLICATION . $3,333,000 due in 4 successive quarterly
installments of $833,250 each, with the first quarterly installment payable 30
days after the date MBI provides Mallinckrodt written notice accompanied by
supporting documentation that MBI has submitted to the FDA either its initial
PMA application or its initial NDA application for ALBUNEX;

         (c) FDA ACCEPTANCE OF APPLICATION. $3,334,000 due in 4 successive
quarterly installments of $833,500 each, with the first quarterly installment
payable 30 days after the date MBI provides Mallinckrodt written notice
accompanied by supporting documentation that the FDA has accepted either MBI's
initial PMA application or initial NDA application for ALBUNEX;

         (d) FDA APPROVAL. $8,000,000 due in 4 successive quarterly installments
of $2,000,000 each, with the first quarterly installment payable 30 days after
the date MBI provides Mallinckrodt written notice accompanied by a copy of the
FDA initial approval letter that the FDA has issued its initial approval letter
for ALBUNEX with an indication as set forth in APPENDIX 4; and

         (e) FIRST COMMERCIAL SHIPMENT . $3,000,000 due in 4 successive
quarterly installments of $750,000 each, with the first quarterly installment
payable 30 days after the date Mallinckrodt accepts MBI's first commercial
shipment of ALBUNEX under ARTICLE 2.

In no event shall Mallinckrodt be obligated to make payments except with respect
to the first instance in which a particular milestone is achieved. MBI
acknowledges that Mallinckrodt has previously made all of the payments that
Mallinckrodt was required to make under SECTION 4.01.

         4.02 INITIAL MARKETING PAYMENT.

         (a) In addition to the other amounts due under ARTICLE 4, Mallinckrodt
shall pay MBI an amount of United States dollars equal to the amount of Net
Sales of ALBUNEX in the Territory for the 365-day period commencing on the
Launch Date.

         (b) Mallinckrodt shall deliver to MBI within 60 days after the end of
such 365-day period, as the case may be, a true and accurate report, covering
such period in sufficient detail to accurately account for gross sales and all
adjustments used to derive Aggregate Net Sales subject to this SECTION 4.02.

         (c) Simultaneously with the delivery of the report described in SECTION
4.02(b), Mallinckrodt shall pay MBI the amount described in SECTION 4.02(a) for
such period covered by the report. The payment shall be made in United States
dollars.




         (d) Notwithstanding anything in this SECTION 4.02 to the contrary,
Mallinckrodt shall not be obligated to pay in excess of $30,000,000 pursuant to
this SECTION 4.02 regardless of the amount of Net Sales during the 365-day
period commencing on the Launch Date.

         (e) MBI acknowledges that Mallinckrodt has previously made all of the
payments that Mallinckrodt was required to make under SECTION 4.02.

         4.03 XXXXXXXXX ROYALTIES.

         (a) Provided that MBI has timely made all prior royalty payments to Xx.
Xxxxxxx X. Xxxxxxxxx pursuant to the Xxxxxxxxx License, Mallinckrodt shall pay
to MBI in trust for further payment by MBI to Xx. Xxxxxxx X. Xxxxxxxxx an amount
equal to one-half of MBI's royalty obligations to Xx. Xxxxxxx X. Xxxxxxxxx
pursuant to the Xxxxxxxxx License attributable to Net Sales of ALBUNEX, up to a
maximum of 3% of Net Sales of ALBUNEX; provided, however, that Mallinckrodt
shall pay to MBI for MBI's account a royalty of 3% on the first $66,666,666.67
of Net Sales of ALBUNEX in the United States, and shall pay to MBI a royalty of
3 % on the next $33,333,333.33 of Net Sales of ALBUNEX in the United States, of
which MBI shall pay one-half to Xx. Xxxxxxx X. Xxxxxxxxx and the other one-half
shall be for MBI's account. As of the date that Mallinckrodt begins to
manufacture ALBUNEX for commercial sale following the earlier of (i) termination
of this Agreement pursuant to which the licenses granted in this Agreement by
MBI to Mallinckrodt survive such termination pursuant to SECTION 14.03 or (ii)
the exercise by MBI of its rights pursuant to Sections 9.01(a) OR (b) and the
satisfaction of the conditions contained in SECTIONS 9.01(c) AND 9.03,
Mallinckrodt's obligation to pay MBI pursuant to the foregoing sentence shall
increase (in the case of (ii), in respect of the affected territory only) to an
amount equal to the total of MBI's royalty obligation pursuant to the Xxxxxxxxx
License attributable to Net Sales of ALBUNEX, up to a maximum of 6% of Net Sales
of ALBUNEX. All payments to MBI pursuant to this SECTION 4.03(a) (i) shall be
made not later than 5 business days prior to the due date of the payment by MBI
to Xx. Xxxxxx X. Xxxxxxxxx under the Xxxxxxxxx License, (ii) to the extent
payable to Xx. Xxxxxx X. Xxxxxxxxx, shall be held by MBI in a segregated trust
account held for the benefit of Xx. Xxxxxx X. Xxxxxxxxx, and (iii) shall be
remitted by MBI from such trust account to Xx. Xxxxxx X. Xxxxxxxxx on or before
the due date of such payment under the Xxxxxxxxx License.

         (b) MBI understands that Mallinckrodt may wish to approach Xx. Xxxxxx
X. Xxxxxxxxx and discuss with him the possibility of a direct license to
Mallinckrodt in the event there is a termination of the Xxxxxxxxx License.
Mallinckrodt shall advise MBI in advance if it desires to hold such discussions
with Xx. Xxxxxx X. Xxxxxxxxx and MBI shall be permitted to participate in such
discussions, provided, however, MBI shall not be obligated to pay any additional
consideration to Xx. Xxxxxx X. Xxxxxxxxx or to undertake any other additional
financial obligation.

         (c) SECTION 5.2 of the Xxxxxxxxx License requires MBI to pay Xx.
Xxxxxxxxx a royalty of 1.25% of the Net Selling Price of Licensed Products sold
by sublicensees of MBI or by an affiliate of any such sublicensee in any country
other than the United States (as "Net Selling Price" and "Licensed Products" are
defined in SECTIONS 1.4 AND 1.2, respectively, of the Xxxxxxxxx License).
Subject to SECTION 3.02F of this Agreement, Mallinckrodt shall pay to MBI, for
payment to Xx. Xxxxxxxxx, a royalty of 0.75% (= 1.25% x 0.60) on Net Sales of
ALBUNEX in the Nycomed Territory. Royalties payable under this SECTION 4.03(c)
shall be paid pursuant to the procedures in SECTION 2.14.

                                    ARTICLE 5

                                 CONFIDENTIALITY

         5.01 GENERAL. At all times during the term of this Agreement and
thereafter, MBI and Mallinckrodt shall keep confidential, not use and not
disclose to third parties any and all of the Confidential Information of the
other party (Mallinckrodt Confidential Information in MBI's case and MBI
Confidential Information in Mallinckrodt's case), except as expressly authorized
by prior written consent of the other party or as provided in this Agreement,





and except to those of its employees as necessary for the performance of this
Agreement so long as such employee has signed a confidentiality and non-use
agreement with terms no less restrictive than set out herein.

         5.02 EXCEPTIONS TO CONFIDENTIALITY. The obligation of confidentiality
and restriction on use imposed by ARTICLE 5 shall not apply to any Confidential
Information that:

         (a) Was in the public domain prior to the date of this Agreement or
subsequently came into the public domain through no fault of such party; or

         (b) Was lawfully received by such party from a third party free of any
obligation of confidence to such third party; or

         (c) Was already in the possession of such party prior to receipt
thereof, directly or indirectly, from the other party; or

         (d) Is required to be disclosed in a judicial or administrative
proceeding after all reasonable legal remedies for maintaining such information
in confidence have been exhausted; or

         (e) Is subsequently and independently developed by employees,
consultants or agents of the disclosing party without reference to the
Confidential Information disclosed.

         5.03 REGULATORY. MBI and Mallinckrodt are permitted to provide to
governmental personnel and agencies, including but not limited to the FDA, all
materials required by such personnel or agency in conjunction with an inspection
of MBI's or Mallinckrodt's facilities, or any governmental submission, report,
license, application or similar item, by MBI or Mallinckrodt, including but not
limited to all documentation and test results relating to ALBUNEX, and samples
of ALBUNEX.

         5.04 CONSULTANTS OR LABORATORIES. MBI or Mallinckrodt may employ the
services of consultants or laboratories as part of the goods and services to be
provided pursuant to this Agreement if each such consultant or laboratory signs
a confidentiality agreement no less restrictive than the confidentiality and
non-use provisions in this Agreement. MBI and Mallinckrodt may disclose the
terms of this Agreement to their respective attorneys, accountants, lenders,
insurance brokers and underwriters, and investment bankers, or as required by
law.

         5.05 PUBLICATIONS. Each party (the Disclosing Party) shall submit to
the other (the "RECEIVING PARTY") at least 90 days prior to submission or
disclosure to any third party, all manuscripts, abstracts, articles, memorandum
or other similar documents relating to ALBUNEX proposed to be published,
disclosed or discussed in any scientific, trade, industry or other publication,
meeting or forum. The Reviewing Party shall notify the Disclosing Party if, in
the reasonable judgment of the Reviewing Party, the proposed disclosure would
violate the terms of this ARTICLE 5. Thereafter, the Disclosing Party shall not
disclose, publish or otherwise make public, the proposed disclosure and shall
take all reasonable steps to prevent such disclosure or publication.

                                    ARTICLE 6

                    REPRESENTATIONS, WARRANTIES AND COVENANTS

         6.01 REPRESENTATIONS, WARRANTIES AND COVENANTS OF MALLINCKRODT.
Mallinckrodt hereby covenants, represents and warrants to MBI that:

         (a) Neither the execution and delivery by it of this Agreement nor the
consummation of the transactions contemplated hereby will violate any law or
regulation, or conflict with or result in a breach of or default under any
agreement, license, instrument, judgment, decree or order to which it is a party
or by which it is bound.




         (b) No approval or consent of any governmental agency or
instrumentality is required for the authorization, execution, or delivery by it
of this Agreement.

         (c) Neither this Agreement nor any document or certificate furnished to
MBI by Mallinckrodt pursuant to this Agreement contains any untrue statement of
a material fact or omits to state a material fact necessary in order to make the
statements contained herein and therein not misleading.

         (d) The execution and delivery of this Agreement and the performance by
Mallinckrodt of its obligations hereunder are within Mallinckrodt's corporate
power, have been duly authorized by proper corporate action on the part of
Mallinckrodt and are not in violation of the Certificate of Incorporation or
By-Laws of Mallinckrodt.

         (e) Xxxxxx Xxxxx 0, all ALBUNEX manufactured by Mallinckrodt pursuant
to ARTICLE 2 will be manufactured or produced in a good and workmanlike manner,
in compliance with then-current FDA Good Manufacturing Practices, and shall be
merchantable, and be fit for the purposes for which it was produced.

         (f) Xxxxxx Xxxxx 0, all ALBUNEX manufactured by Mallinckrodt pursuant
to ARTICLE 2: (i) will be manufactured or produced in compliance with the
Occupational Safety and Health Act, as amended, and the Fair Labor Standards
Act, as amended; (ii) will not be adulterated or misbranded within the meaning
of the Federal Food Drug & Cosmetic Act, and will not be articles which may not,
under the provisions of Sections 404 or 505 of such Act, or any similar state or
local laws, be introduced into interstate commerce; (iii) will comply with all
other applicable standards which are necessary for the manufacture, use or sale
of ALBUNEX including, but not limited to, all rights in patents, trademarks, FDA
approvals, registrations or permits, and all other regulatory permits, approvals
and licenses necessary for the manufacture, use or sale of ALBUNEX; and (iv) use
only USP Human Serum Albumin that is 100% tested and certified AIDS and
Hepatitis B free.

         6.02 REPRESENTATIONS, WARRANTIES AND COVENANTS OF MBI. MBI covenants,
represents and warrants to Mallinckrodt that:

         (a) Neither the execution and delivery by it of this Agreement nor the
consummation of the transactions contemplated hereby will violate any law or
regulation, or conflict with or result in a breach of or default under any
agreement, license, instrument, judgment, decree or order to which it is a party
or by which it is bound.

         (b) No approval or consent of any governmental agency or
instrumentality is required for the authorization, execution, or delivery by it
of this Agreement.

         (c) Neither this Agreement nor any document or certificate furnished to
Mallinckrodt by MBI pursuant to this Agreement contains any untrue statement of
a material fact or omits to state a material fact necessary in order to make the
statements contained herein and therein not misleading. All product and testing
data, and all Know-how and other data and information supplied by MBI with
respect to or in connection with ALBUNEX is and will be accurate and does not
and will not contain any untrue statement of a material fact or omit to state a
material fact necessary in order to make it not misleading.

         (d) The execution and delivery of this Agreement and the performance by
MBI of its obligations hereunder are within MBI's corporate power, have been
duly authorized by proper corporate action on the part of MBI and are not in
violation of the Certificate of Incorporation or By-Laws of MBI.

         (e) Except as provided in SECTION 2.03(d), (i) Mallinckrodt shall have
the exclusive non-cancelable right and license to manufacture, use and sell
ALBUNEX in the Territory, the Additional Territory and the Nycomed Territory,
and (ii) MBI has not appointed, and will not appoint any other distributor,
representative or agent to sell or distribute ALBUNEX in the Territory, the
Additional Territory and the Nycomed Territory (except for Nycomed in the
Nycomed Territory).




         (f) To the best of MBI's knowledge, ALBUNEX can now and hereafter be
manufactured, used and sold in the Territory, the Additional Territory and the
Nycomed Territory without substantial risk of infringement of any right,
interest, or patent of any third party.

         (g) MBI owns or controls the Technology Rights and, to the best of
MBI's knowledge, the patents and patent applications now contained in the
Technology Rights are of sufficient scope to protect ALBUNEX, its production,
use and sale, and any patents, including patents issuing on any of such patent
applications, are, or will be upon issuance, reasonably enforceable.

         (h) There is no claim, suit, proceeding or other investigation pending
or, except as set forth in SCHEDULE 6.02(h), threatened against MBI in
connection with the research, development, manufacture, sale, use or
distribution of ALBUNEX, or which would prevent the performance of this
Agreement.

         (i) During Phases 1 and 2, all ALBUNEX sold by MBI to Mallinckrodt
pursuant to ARTICLE 2 will be manufactured or produced in a good and workmanlike
manner, in compliance with then-current FDA Good Manufacturing Practices, and
shall be merchantable, and be fit for the purposes for which it was produced.

         (j) During Phases 1 and 2, all ALBUNEX sold by MBI to Mallinckrodt
pursuant to ARTICLE 2: (i) will be manufactured or produced in compliance with
the Occupational Safety and Health Act, as amended, and the Fair Labor Standards
Act, as amended; (ii) will not be adulterated or misbranded within the meaning
of the Federal Food Drug & Cosmetic Act, and will not be articles which may not,
under the provisions of Sections 404 or 505 of such Act, or any similar state or
local laws, be introduced into interstate commerce; (iii) will comply with all
other applicable standards which are necessary for the manufacture, use or sale
of ALBUNEX including, but not limited to, all rights in patents, trademarks, FDA
approvals, registrations or permits, and all other regulatory permits, approvals
and licenses necessary for the manufacture, use or sale of ALBUNEX; and (iv) use
only USP Human Serum Albumin that is 100% tested and certified AIDS and
Hepatitis B free.

         (k) MBI has spent at least $10 million on clinical trials to support
regulatory filings in the United States for cardiac indications of ALBUNEX and
the related compilation, analysis and presentation of clinical results and other
ancillary activities, as directed by the Joint Steering Committee.

         (l) MBI has spent at least $10 million on ALBUNEX development,
including, but not limited to, the development of new ALBUNEX indications,
products and processes, related preclinical and clinical studies and trials,
intellectual property protection, ALBUNEX manufacturing maintenance and
development (including manufacturing overhead) and compliance with FDA and state
regulatory requirements (including required filings and submissions and
necessary validations, qualifications and over approvals and proceedings).

                                    ARTICLE 7

                              LICENSE OF TECHNOLOGY

         7.01 TECHNOLOGY RIGHTS.

         (a) MBI hereby grants to Mallinckrodt a license of, including the right
to sublicense others under, the Technology Rights and Know-how, in order to
test, evaluate and develop ALBUNEX covered thereby, and to make, use, promote,
sell, offer to sell and otherwise commercialize ALBUNEX in the Territory, the
Additional Territory and the Nycomed Territory. Subject only to the limitations
contained in SECTIONS 9.01(a) AND (b), AND 14.03(b) and MBI's utilization of the
Technology Rights and Know-how to perform its obligations pursuant to this
Agreement (including MBI's right to manufacture ALBUNEX), this license from MBI
is exclusive, perpetual and non-cancelable:

                  (1) in the Territory;




                  (2) in the Additional Territory; and

                  (3) in the Nycomed Territory, subject to (A) Nycomed's rights
         in the Nycomed Territory under the Nycomed Agreement, as amended by the
         Nycomed License Amendment, and (B) the terms of the Nycomed Territory
         Amendment.

         (b) MBI hereby grants to Mallinckrodt and to its Affiliates and
sublicensees the right to grant irrevocable licenses to end users of ALBUNEX, to
use ALBUNEX obtained directly or indirectly from Mallinckrodt, its Affiliates or
its sublicensees for any purpose within the Technology Rights or the Know-how.
Subject only to (i) the limitations contained in SECTIONS 9.01, 9.02 AND
14.03(b), (ii) MBI's utilization of the Technology Rights and Know-how to
perform its obligations pursuant to this Agreement (including MBI's right to
manufacture ALBUNEX) and (iii) the same limitations in SECTIONS 7.01(a)(2)-(3),
this license from MBI is exclusive, perpetual and non-cancelable.

         7.02 MBI TRADEMARKS.

         (a) MBI hereby grants to Mallinckrodt and to its Affiliates and
sublicensees a royalty-free right and license in perpetuity to use any MBI
Trademark on or in connection with the manufacture, advertising, distribution,
or sale of ALBUNEX made by or on behalf of Mallinckrodt, its Affiliates or
sublicensees in the Territory, the Additional Territory and the Nycomed
Territory. Prior to the exercise by MBI of its rights under SECTIONS 9.01(a) OR
(b), and subject to the limitations of SECTION 14.03, this license is
non-cancelable and is exclusive with respect to all others including MBI.

         (b) Mallinckrodt undertakes that the quality of goods sold and offered
for sale under the MBI Trademarks or trademarks licensed by Mallinckrodt from
MBI pursuant to SECTION 7.02(a) (collectively the "TRADEMARKS") shall conform to
the standards approved by the appropriate regulatory authorities in the
Territory, the Additional Territory and the Nycomed Territory, respectively.
Mallinckrodt undertakes to use all reasonable efforts to ensure that the said
standards conform to the standards of quality for said goods approved in writing
by the other party.

         (c) MBI shall have the right of access through a duly authorized agent
to Mallinckrodt's business premises at reasonable intervals and during ordinary
business hours for the purpose of inspecting and/or testing the goods sold or
offered for sale under the Trademarks upon written request to Mallinckrodt by
MBI.

         (d) The Trademarks shall be used only in accordance with generally
accepted trademark practices. Any usage by Mallinckrodt in advertising,
promotional materials or otherwise shall be submitted to MBI for informational
purposes. Mallinckrodt will take into account the comments of MBI.

         (e) Mallinckrodt agrees to notify MBI in writing of any conflicting
uses of and applications for registration of the Trademarks or of any acts of
infringement or of unfair competition involving the Trademarks promptly after
such matters are brought to its attention or it has knowledge thereof.

         7.03 TECHNOLOGY TRANSFER AND IMPROVEMENTS.

         (a) MBI shall from time to time provide, or cause to be provided, to
Mallinckrodt copies of all pharmacological, toxicological, and clinical data and
reports, stability data, manufacturing, quality control, and other information,
Know-how, technology and discoveries of Know-how relating to ALBUNEX now or
hereafter known to, or possessed, acquired or developed by MBI which are needed
or helpful to manufacture, have manufactured, use or sell ALBUNEX in the
Territory, the Additional Territory and the Nycomed Territory. All such items
known to, possessed, acquired or developed by MBI, regardless if transferred to
Mallinckrodt, shall be deemed to be included in the licenses granted pursuant to
SECTION 7.01 without any further action required by MBI. All information
described in this SECTION 7.03(a) shall be regarded as Confidential Information.




         (b) MBI shall promptly notify and make available to Mallinckrodt all of
MBI's improvements to ALBUNEX (including additional indications), its method of
use and its method of manufacture, and all of such improvements, regardless if
transferred to Mallinckrodt, shall be deemed to be included in the licenses
granted pursuant to SECTION 7.01 without any further action required by MBI.

         7.04 ANCILLARY DEVICES. Mallinckrodt and MBI agree that any device,
tool or similar item related to or helpful in the sale, use or application of
ALBUNEX that is not covered by the Technology Rights or Know-how that is now or
hereinafter owned or controlled by either of them (an Ancillary Devices) shall
be discussed with the other party. Prior to disclosure or discussion with third
parties, each agrees to negotiate in good faith with the other the opportunity
of marketing the Ancillary Device in connection with the sale of ALBUNEX and the
possibility of an economic arrangement similar to that for ALBUNEX established
pursuant to this Agreement.

         7.05 COMPETING PRODUCTS.

         (a) Mallinckrodt shall promptly notify MBI of an opportunity for
Mallinckrodt to acquire, purchase, or license from a third party any technology
relating to products described in SECTIONS 1.05, and which is not covered by any
Technology Rights, or which does not incorporate, is not covered by or is not
made by the use of Know-how (the "MALLINCKRODT PURCHASED COMPETING TECHNOLOGY").
Mallinckrodt shall license its rights to the Purchased Competing Technology to
MBI upon MBI's satisfactory undertaking of 40% of all past, present and future
costs and expenses (including future royalties or other payments) incurred or to
be incurred by Mallinckrodt in connection with or arising out of the
acquisition, purchase or license of the Mallinckrodt Purchased Competing
Technology. Such license shall provide for an economic arrangement similar to
that for ALBUNEX established pursuant to this Agreement. If MBI does not
satisfactorily undertake within a reasonable time to pay 40% of all such costs
and expenses, Mallinckrodt may utilize its rights to the Mallinckrodt Purchased
Competing Technology in any manner whatsoever free and clear of any restraints
or obligations imposed by this Agreement; without limitation, it may manufacture
or purchase from others any products made by using the Mallinckrodt Purchased
Competing Technology.

         (b) MBI shall promptly notify Mallinckrodt of an opportunity for MBI to
acquire, purchase, or license from a third party of any technology relating to
products described in SECTIONS 1.05, and which is not covered by any Technology
Rights, or which does not incorporate, is not covered by or is not made by the
use of Know-how (the "MBI PURCHASED COMPETING TECHNOLOGY"). MBI shall license
its rights to the MBI Purchased Competing Technology to Mallinckrodt upon
Mallinckrodt's satisfactory undertaking of 60% of all past, present and future
costs and expenses (including future royalties or other payments) incurred or to
be incurred by MBI in connection with or arising out of the acquisition,
purchase or license of the MBI Purchased Competing Technology. Such license
shall provide for an economic arrangement similar to that for ALBUNEX
established pursuant to this Agreement. If Mallinckrodt does not satisfactorily
undertake within a reasonable time to pay 60% of all such costs and expenses,
MBI may utilize its rights to the MBI Purchased Competing Technology in any
manner whatsoever free and clear of any restraints or obligations imposed by
this Agreement; without limitation, it may manufacture or purchase from others
any products made by using the MBI Purchased Competing Technology.

         (c) Notwithstanding the foregoing, Mallinckrodt shall have no
obligation under this SECTION 7.05 if Mallinckrodt does not use or plan to use
the Mallinckrodt Purchased Competing Technology, or if MBI does not use or plan
to use the MBI Purchased Competing Technology, to compete with ALBUNEX in the
market for in vivo contrast agents for ultrasound and echocardiography
diagnostic imaging.




                                    ARTICLE 8

                                     PATENTS

         8.01 PATENT EXPENSES.

         (a) Mallinckrodt shall be responsible for the expenses of the
maintenance of (i) U.S. Patent No. 4,572,203 entitled "Contact (sic) Agents for
Ultrasonic Imaging" issued February 25, 1986, (ii) U.S. Patent No. 4,718,433
entitled "Contrast Agents for Ultrasonic Imaging" issued January 12, 1988, a
continuation-in-part of U.S. Patent No. 4,572,203, (iii) U.S. Patent No.
4,774,958 entitled "Ultrasonic Imaging Agent and Method of Preparation" issued
October 4, 1988, a continuation-in-part of U.S. Patent No. 4,718,433, and any
current continuing applications or future applications thereof in the United
States of America or Canada, and of the continuation and maintenance of the 3
U.S. pending patent applications of Xx. Xxxxxxx Xxxxxx assigned to MBI in the
United States of America or Canada.

         (b) With respect to any other patent filings, Mallinckrodt and MBI
shall notify the other of any potentially patentable invention relating to
ALBUNEX covering any portion of the Know-how or Technology Rights. The parties
thereafter shall meet and discuss the appropriateness and strategy of filing
patent applications in any country of the Territory, the Additional Territory
and the Nycomed Territory.

         (c) If MBI, in its reasonable discretion, determines to file any patent
application in the Territory, the Additional Territory or the Nycomed Territory
covering any portion of the Know-how or Technology Rights, MBI shall be
responsible for prosecution and maintenance of the patent application, but
Mallinckrodt shall be responsible for the payment of all maintenance fees for
the resulting patent (if issued). (If a third party is contractually required by
an agreement with MBI to pay any such maintenance fees, however, Mallinckrodt
shall have no obligation to pay them unless MBI gives Mallinckrodt written
notice at least 30 days before payment is due that the third party has not yet
paid them, in which case Mallinckrodt shall pay the maintenance fees on or
before the date due if MBI requests (unless, in the meanwhile, the third party
pays them).

         (d) If MBI does not file a particular patent application in the
Territory, the Additional Territory or the Nycomed Territory covering any
portion of the Know-how or Technology Rights, Mallinckrodt may request MBI to do
so, and if MBI declines Mallinckrodt's request (either by informing Mallinckrodt
to that effect or by failing to respond to Mallinckrodt's request within 30 days
after receipt of the request), Mallinckrodt may file, prosecute and maintain
that patent application. MBI shall provide Mallinckrodt with sufficient
information (to the extent in MBI's possession or under its control) and other
cooperation (including necessary signatures of MBI employees) to permit
Mallinckrodt to do so. If Mallinckrodt does so, it shall be responsible for the
payment of all maintenance fees of the resulting patent (if issued).

         (e) MBI and Mallinckrodt shall each cooperate and render reasonable
assistance to the other in connection with the activities contemplated by this
SECTION 8.01.

         8.02 PATENT INFRINGEMENT.

         (a) MALLINCKRODT'S RIGHT TO ENFORCE. Mallinckrodt shall have the right,
with respect to any injury or loss suffered or threatened to be suffered by
Mallinckrodt as a result of the infringement or threatened infringement of MBI's
patents relating to ALBUNEX in the Territory, the Additional Territory or the
Nycomed Territory, to enforce MBI's affected patents and prosecute infringers,
if MBI elects not to bring suit covering such injury or loss within 3 months
after the earlier of (i) the date that MBI learns of any such patent
infringement other than by written notice from Mallinckrodt or (ii) the date
that Mallinckrodt gives MBI written notice of any such patent infringement.

         (b) COOPERATION. In the event either party hereto shall initiate or
carry on legal proceedings to enforce patents against an alleged infringer, the
other party hereto shall fully cooperate with the party initiating or carrying
on-such proceedings.




         (c) LITIGATION PROCEDURES. Either party shall have the right during the
time that this Agreement is in effect, and subject to its terms (including, but
not limited to, SECTIONS 8.01 AND 8.02(a)), to xxx infringers of patents and
either party shall permit the use of its name in all such suits, shall sign all
necessary papers, take all rightful oaths, and upon reasonable request shall
assist the other party in such suits at its own expense.

         (d) LITIGATION BY MALLINCKRODT. In the event Mallinckrodt shall
institute suit or legal proceedings to enforce any patent, MBI shall be entitled
to be represented by counsel of its own choosing, at its sole expense. From any
recovery awarded or settlement reached as a result of such suit or legal
proceedings, Mallinckrodt (i) may deduct the full amount of its expenses of
prosecuting the same (including attorneys' fees and court costs); (ii) shall pay
to MBI, to the extent possible after payment of (i) above, the full amount of
MBI's cost of participating in the same; (iii) shall pay to MBI, after full
payment of (i) and (ii) above, 50% of any remainder to the extent the recovery
or settlement relates to any period in which Mallinckrodt's licenses under this
Agreement had not terminated under SECTION 14.03(b) (with the exception in
either case that to the extent that the recovery or settlement is in respect of
Mallinckrodt's injuries or losses regarding ALBUNEX manufactured by
Mallinckrodt, the amount payable to MBI under this SECTION 8.02(d) (iii) shall
be a percentage of the remainder determined in a manner consistent with the
royalty payable by Mallinckrodt in respect of Net Sales of such ALBUNEX, as the
case may be); and (iv) may retain the balance. Mallinckrodt shall not
discontinue or settle any such suit or other legal proceedings brought by it
without obtaining the prior concurrence of MBI, which shall not be unreasonably
withheld and giving MBI a timely opportunity to continue such proceedings in its
own name, under its sole control at its sole expense, provided that
Mallinckrodt's reasonable litigation expenses (including attorneys fees and
court costs) shall be reimbursed by MBI.

         (e) LITIGATION BY MBI. In the event MBI shall institute suit or legal
proceedings to enforce any patent and the suit or legal proceedings are, in
whole or in part, in respect of any injury or loss suffered or threatened to be
suffered by Mallinckrodt as a result of the infringement or threatened
infringement of MBI's patents relating to ALBUNEX in the Territory, the
Additional Territory or the Nycomed Territory, Mallinckrodt shall be entitled to
be represented by counsel of its own choosing, at its sole expense. From any
recovery awarded or settlement reached as a result of such suit or legal
proceedings, MBI (i) may deduct the full amount of its expenses of prosecuting
the same (including attorneys' fees and court costs); (ii) shall pay to
Mallinckrodt, to the extent possible after payment of (i) above, the full amount
of Mallinckrodt's cost of participating in the same; (iii) shall pay to
Mallinckrodt, after full payment of (i) and (ii) above, 50% of any remainder to
the extent the recovery or settlement relates to any period thereafter in which
Mallinckrodt's licenses under this Agreement had not terminated under SECTION
14.03(b) and is in respect of Mallinckrodt's injuries or losses (with the
exception in either case that to the extent that the recovery or settlement is
in respect of Mallinckrodt's injuries or losses regarding ALBUNEX manufactured
by Mallinckrodt, the amount payable to Mallinckrodt under this SECTION 8.02(e)
(iii) shall be the remainder less a percentage of the remainder determined in a
manner consistent with the royalty payable by Mallinckrodt in respect of Net
Sales of such ALBUNEX, as the case may be); and (iv) may retain the balance. MBI
shall not discontinue or settle any such suit or other legal proceedings brought
by it without obtaining the prior concurrence of Mallinckrodt, which shall not
be unreasonably withheld, and giving Mallinckrodt a timely opportunity to
continue such proceedings in its own name, under its sole control, and at its
sole expense, provided that MBI's reasonable litigation expenses (including
attorneys fees and court costs) shall be reimbursed by Mallinckrodt.

         8.03 PATENT INDEMNIFICATION.

         (a) MBI shall indemnify and hold harmless Mallinckrodt against any and
all Losses based on and resulting from any claim of infringement of any patent
of a third party in the United States of America, Canada, any of the countries
of Western Europe (as that term is commonly understood), Japan, Australia or New
Zealand and which claim arises from Mallinckrodt's manufacture, use or sale of
ALBUNEX pursuant to this Agreement.

         (b) With respect to any other Losses based on and resulting from any
claim of infringement of any patent in a country in the Territory, the
Additional Territory or the Nycomed Territory (other than a country named or
referred to SECTION 8.03(a)) and which claim arose from Mallinckrodt's
manufacture, use or sale of ALBUNEX pursuant to this Agreement, Mallinckrodt
shall be responsible for 60% of any such Loss and MBI shall be responsible for
40% of any such Loss (with the exception that if any such Loss is in respect of
ALBUNEX manufactured by Mallinckrodt, MBI shall be responsible for a percentage
of the Loss determined in a manner



consistent with the royalty payable by Mallinckrodt in respect of Net Sales of
such ALBUNEX, as the case may be and Mallinckrodt shall be responsible for the
remainder of the Loss).

         (c) In the event any third party asserts any claim with respect to any
matter as to which the indemnities in this SECTION 8.03 relate, the party
against whom the claim is asserted shall give prompt notice to the other party.
The party who has the responsibility to pay the entire potential Loss or the
greatest share of the potential Loss, as the case may be (the "INDEMNIFYING
PARTY"), shall have the right at its election to take over the defense or
settlement of the third party claim at its own expense by giving prompt notice
to the other party (the "INDEMNIFIED PARTY"). If the Indemnifying Party does not
give such notice and does not proceed diligently so to defend the third party
claim within 30 days after receipt of the notice of the third party claim, the
Indemnifying Party shall be bound by any defense or settlement that the
Indemnified Party may make as to those claims, and shall reimburse the
Indemnified Party for its Losses and expenses related to the defense or
settlement of the third party claim. The Indemnifying Party shall be bound by
any settlement that the Indemnified Party may make, however, only if the
Indemnified Party gives the Indemnifying Party at least 15 days prior written
notice of the settlement and either (i) the Indemnifying Party does not object
to the proposed settlement by written notice to the Indemnified Party within 10
days after receipt of the Indemnified Party's notice or (ii) if the Indemnifying
Party does timely object to the proposed settlement, the Indemnifying Party does
not at the same time agree to (A) undertake the further defense of the third
party claim, (B) indemnify the Indemnified Party for any Loss in excess of its
proposed settlement and (C) reimburse the Indemnified Party for its reasonable
expenses related to the defense of the third party claim. Upon request of the
Indemnified Party, the Indemnified Party shall be consulted from time to time
and be informed of the status of the third party claim. The parties shall
cooperate in defending against any asserted third party claims. For purposes of
this SECTION 8.03, the indemnification of the Indemnified Party shall also
include the indemnification of the Indemnified Party's employees, agents,
Affiliates, and third parties performing services for the Indemnified Party.

         (d) Notwithstanding the foregoing, in the event that the manufacture or
sale of ALBUNEX or use of ALBUNEX for fundamental ultrasound imaging, in
Mallinckrodt's and MBI's reasonable judgment present potential infringement
problems with respect to any patent owned by a third party, and in
Mallinckrodt's and MBI's reasonable judgment it is commercially reasonable to
secure a license thereunder, Mallinckrodt and MBI shall attempt to secure a
license thereunder for Mallinckrodt and MBI. Any known or unknown claims
voluntarily settled in this manner that result in an up-front license fee or
royalty, if settled on terms satisfactory to Mallinckrodt, or any known or
unknown claims that result in an up-front license fee or royalty imposed by
court order, shall be paid up to 50% by Mallinckrodt solely out of its future
Net Sales of ALBUNEX and subject to a cap (for all settlements and court-ordered
license fees or royalties treated cumulatively) of 4% of such Net Sales of
ALBUNEX and the remainder paid by MBI, subject to the following additional
conditions: (i) Subject to the 4% cumulative cap, Mallinckrodt will prepay 50%
of any up-front license fees (treated cumulatively) up to a maximum amount of
$5,000,000; (ii) any prepayment made by Mallinckrodt under subsection (i) shall
be non-refundable and shall be offset against any quarterly payments owed by
Mallinckrodt pursuant to subsection (iii); (iii) Subject to the 4% cumulative
cap and the offset of prepaid license fees, Mallinckrodt will pay its share of
any up-front license fees not covered by the $5,000,000 prepayment, plus 50% of
any royalties (treated cumulatively), over time and on a quarterly basis in
amounts not to exceed 4% of each quarter's Net Sales of ALBUNEX. If a settlement
is not satisfactory to Mallinckrodt and MBI enters into a settlement agreement
despite Mallinckrodt's objection, then MBI shall pay 100% of the obligations
resulting from such settlement.

         (e) The foregoing Section 8.03(a) shall not apply to any method of
imaging claims in patents owned by a third party (other than any one or more of
the Plaintiffs) that cover a method of ultrasound imaging other than fundamental
ultrasound imaging.




                                    ARTICLE 9

                            RIGHTS TO ACQUIRE ALBUNEX

         9.01 NEGOTIATIONS TO ACQUIRE ALBUNEX. For a period (the "EXCLUSIVE
PERIOD") commencing with the execution of this Agreement and ending on the fifth
anniversary of the date that the FDA approves an intravenous myocardial
perfusion indication of ALBUNEX for sale in the United States, MBI shall not
sell or otherwise dispose of (by license or otherwise) any of its rights, assets
or technology relating to ALBUNEX or MBI's interest in any Technology Rights or
Know-How. During the Exclusive Period either MBI or Mallinckrodt may initiate
good faith discussions regarding the acquisition by Mallinckrodt of any of the
foregoing.

           If, at the end of the Exclusive Period, Mallinckrodt and MBI have not
agreed to such an acquisition, MBI shall have the following options separately
as to each of the Territory, the Additional Territory and the Nycomed Territory:

         (a) Subject to the right of Mallinckrodt to continue to make, use,
distribute and sell ALBUNEX in the same territory pursuant to the licenses
granted in ARTICLE 7, MBI may co-market and distribute ALBUNEX in a particular
territory under the MBI label and for its own account and may do so in the same
manner (including, but not limited to, the use of distributors or sales
representatives), on a country-by-country basis, as Mallinckrodt from time to
time may market and distribute ALBUNEX in that territory;

         (b) Subject to (i) the right of Mallinckrodt to continue to make, use,
distribute and sell ALBUNEX in the same territory pursuant to this Agreement,
(ii) Mallinckrodt's right of first refusal under SECTION 9.02 and (iii) the
restrictions set forth in SECTIONS 9.01(d), (e) AND (f), as of the fifth
anniversary of the date that the FDA approves an intravenous myocardial
perfusion indication of ALBUNEX for sale in the United States, MBI may sell or
dispose of (by license or otherwise) to a single transferee, other than pursuant
to an assignment permitted in ARTICLE 16.02(d), in a single transaction, all but
not less than all, of MBI's rights, assets and technology relating to ALBUNEX in
a particular territory and all, but not less than all, of MBI's interest in any
Technology Rights or Know-how as it relates to that territory, and such
transferee shall not be subject to the any of the limitations and restrictions
on MBI under SECTION 9.01, except for the restrictions in SECTION 9.01(e), or to
Mallinckrodt's right of first refusal under SECTION 9.02; or

         (c) MBI may continue its existing relationship with Mallinckrodt
pursuant to the terms of this Agreement in a particular territory, subject to
MBI's option to exercise its rights under SECTIONS 9.01(a) OR (b) at a later
time. The exercise of option (a) by MBI at any time in respect of a particular
territory shall not preclude MBI from exercising option (b) at a later time in
respect of that territory.

         (d) If MBI exercises any of its options under SECTIONS 9.01(a) AND (b)
in respect of any territory, Mallinckrodt may manufacture ALBUNEX in any
quantities for sale in that territory and no royalty shall be payable to MBI in
respect of Net Sales in that territory of ALBUNEX manufactured after MBI's
exercise of the option in question.

         (e) MBI or any of its licensees exercising their rights under SECTIONS
9.01(a) OR (b) must purchase all ALBUNEX only from Mallinckrodt.

         (f) If, at any time, MBI elects to exercise any of its rights under
SECTIONS 9.01(a) OR (b), MBI or whoever performs the services must immediately
pay to Mallinckrodt an amount equal to the aggregate of: (i) one-half of the
expenses paid by Mallinckrodt to secure approval of cardiology indications of
OPTISON in the United States, (ii) one-half of the Technology Transfer Costs
paid by Mallinckrodt under Section 2.03(a) (both payments and reimbursements)
and (iii) one-half of any license fees, milestone payments or the like received
by MBI pursuant to MBI's exercise of its rights under Sections 9.01(a) or (b).




         9.02 MALLINCKRODT'S RIGHT OF FIRST REFUSAL. MBI grants Mallinckrodt a
right of first refusal to purchase MBI's rights, assets and technology relating
to ALBUNEX in each of the Territory, the Additional Territory, the Nycomed
Territory and the Asian Territory, and MBI's interest in any Technology Rights
or Know-how (collectively, in respect of any particular territory, the
"ASSETS"), as follows:

         (a) If MBI proposes to sell the Assets, MBI shall give Mallinckrodt
written notice of MBI's intention (the "SALES NOTICE"), providing all relevant
details and copies of all relevant documents, including but not limited to any
letter of intent and any draft or executory sales agreement.

         (b) Mallinckrodt shall have 45 days from the date it receives MBI's
Sales Notice in which to exercise its right of first refusal to purchase the
Assets specified in the Sales Notice, at the purchase price and on the terms
specified in the Sales Notice, by giving MBI written notice to that effect. If
Mallinckrodt notifies MBI that Mallinckrodt declines to exercise its right of
first refusal, or if Mallinckrodt fails to exercise its right of first refusal
in a timely manner, MBI may proceed to sell the Assets to the purchaser
identified in the Sales Notice but only at a purchase price and on terms at
least as favorable to MBI as those specified in the Sales Notice. If MBI fails
to consummate such sale within 75 days of the Sales Notice, then the provisions
of this SECTION 9.02 shall thereafter apply to any subsequent proposed
disposition of the Assets.

         (c) If the purchase price specified in the Sales Notice includes any
property other than money, MBI and Mallinckrodt shall jointly determine the
value of this other property. If they are unable to agree on its value within 45
days from the date Mallinckrodt receives MBI's Sales Notice, they shall each
promptly select a nationally or regionally recognized investment banking firm or
consulting firm, and these 2 firms shall select a third such firm (the
"VALUATION FIRM") to determine the value of this other property. The Valuation
Firm's determination shall be conclusive. MBI and Mallinckrodt shall use their
best efforts to ensure that the Valuation Firm makes its determination not later
than 5 business days after its selection. The period in which Mallinckrodt may
exercise its right of first refusal shall be extended to 5 business days after
the Valuation Firm's determination. MBI and Mallinckrodt shall each pay the fees
of the firm that it selects and one-half of the fees of the Valuation Firm.

         (d) In the case of a proposed sale of the Assets relating to the
Territory, Mallinckrodt shall have a credit against the purchase price specified
in MBI's Sales Notice equal to:

                  (1) the sum of the payments by Mallinckrodt pursuant to
         SECTIONS 4.01 AND 4.02 less

                  (2) an amount equal to 20% of Net Sales in the Territory prior
         to the date of Mallinckrodt's receipt of the Sales Notice (if such
         difference is less than zero, there shall be no credit).

         (e) In the case of a proposed sale of the Assets relating to the
Nycomed Territory, Mallinckrodt shall have a credit against the purchase price
specified in MBI's Sales Notice equal to:

                  (1) the sum of the payments by Mallinckrodt pursuant to
         SECTIONS 3.02C(a) AND (b) less

                  (2) an amount equal to 20% of Net Sales in the Nycomed
         Territory prior to the date of Mallinckrodt's receipt of the Sales
         Notice (if such difference is less than zero, there shall be no
         credit).

         (f) In the case of a proposed sale of the Assets relating to the Asian
Territory, Mallinckrodt shall have a credit against the purchase price specified
in MBI's Sales Notice equal to:

                  (1) the sum of the payments by Mallinckrodt to acquire any
         rights in any of the Asian Territories less

                  (2) an amount equal to 20% of Net Sales in the Asian Territory
         prior to the date of Mallinckrodt's receipt of the Sales Notice (if
         such difference is less than zero, there shall be no credit).




         (g) If Mallinckrodt exercises its right of first refusal, closing of
its purchase shall take place on the date and at the location that the parties
agree on, but no later than 75 days after the date of Mallinckrodt's notice to
MBI exercising Mallinckrodt's right of first refusal. If Mallinckrodt does not
exercise its right of first refusal, any sale is subject to Mallinckrodt's
rights under this Agreement.

         9.03 MALLINCKRODT ABANDONMENT OF ALBUNEX, EXCLUDING INFOSON AND FIRST
GENERATION PRODUCT.

         (a) Other than Infoson and the First Generation Product, Mallinckrodt
shall be deemed to have abandoned ALBUNEX if all of the following conditions
occur after the Launch Date:

                  (1) ALBUNEX may be lawfully sold in the United States of
         America in interstate commerce, without any threat of infringement upon
         any third party rights, any threat of any action by any regulatory
         agency, including but not limited to the FDA, or any threat of product
         recall, or any danger to the safety of the users of ALBUNEX or the
         public generally;

                  (2) MBI has supplied and continues to offer to supply, ALBUNEX
         in sufficient quantities to Mallinckrodt conforming to the Product
         Specifications during Phases 1 and 2; and

                  (3) Mallinckrodt has failed to offer at least one Albunex
         Product, other than Infoson and the First Generation Product, for sale
         in the ordinary course of business for a continuous period of not less
         than 180 days.

         (b) Upon satisfaction of all the conditions described in SECTION
9.02(a) and receipt by Mallinckrodt of the following:

                  (1) Payment by cashier's check or by wire transfer in
         immediately available funds an amount equal to the sums previously paid
         by Mallinckrodt to MBI pursuant to SECTIONS 4.01 AND 4.02; and

                  (2) An Unconditional Waiver and Release pursuant to which MBI
         waives any and all rights, claims, damages or other remedies against
         Mallinckrodt relating to or out of this Agreement, in a form
         satisfactory to counsel for Mallinckrodt;

this Agreement shall terminate.

         9.04 MALLINCKRODT FAILURE TO EXPEND ADEQUATE RESOURCES. (FOR HISTORICAL
PURPOSES ONLY)

         (a) Mallinckrodt shall be deemed to have failed to commit adequate
resources to the marketing, sale or distribution of ALBUNEX if all of the
following conditions occur:

                  (1) Prior to the Launch Date Mallinckrodt fails to spend at
         least $500,000 in out of pocket costs in the pre-marketing, marketing,
         sales, distribution, or promotion of ALBUNEX, including but not limited
         to advertising, marketing literature, symposia, focus groups, product
         promotion, trade and industry shows, and the recruitment of medical and
         scientific opinion leaders;

                  (2) During the first year following the Launch Date
         Mallinckrodt fails to spend at least $500,000 in out of pocket costs in
         the marketing, sales, distribution, or promotion of ALBUNEX, including
         but not limited to advertising, marketing literature, symposia, focus
         groups, product promotion, trade and industry shows, and the
         recruitment of medical and scientific opinion leaders; and

                  (3) Mallinckrodt fails to spend such amounts within the 180
         day period beginning on the date MBI notifies Mallinckrodt in writing
         that Mallinckrodt has failed to spend the such amounts.




         (b) Upon satisfaction of all the conditions described in SECTION
9.03(a) and receipt by Mallinckrodt of payment by cashier's check or by wire
transfer in immediately available funds in an amount equal to one-half of the
sums previously paid by Mallinckrodt to MBI pursuant to SECTIONS 4.01 AND 4.02,
subject to the right of Mallinckrodt to continue to distribute and sell ALBUNEX
in the Territory pursuant to this Agreement, the provisions of ARTICLE 2 shall
terminate and MBI may co-market and distribute ALBUNEX in the Territory under
the MBI label and for its own account and may do so in the same manner
(including, but not limited to, the use of distributors or sales
representatives), on a country-by-country basis, as Mallinckrodt from time to
time may market and distribute ALBUNEX in the Territory.

         (c) MBI acknowledges that Mallinckrodt has not failed to commit
adequate resources to the marketing, sale or distribution of ALBUNEX, as
described in SECTION 9.03(a).

                                   ARTICLE 10

            PAYMENTS TO KEY EMPLOYEES (FOR HISTORICAL PURPOSES ONLY)

         10.01    KEY EMPLOYEE PAYMENTS.

         (a) Subject to the terms and conditions of this SECTION 10.01, during
the 2 year period commencing on the Launch Date of ALBUNEX by Mallinckrodt if
the first commercial sale of ALBUNEX after the Launch Date actually occurs,
Mallinckrodt shall, at times to be agreed to by the parties, pay to MBI an
aggregate of $2,500,000 upon accomplishment of the milestones described in
SECTION 10.01(b). Mallinckrodt and MBI agree that a minimum payment shall be due
by the due date of MBI's tax return for MBI's tax year in which the first
commercial sale of ALBUNEX after the Launch Date actually occurs (including
extensions thereof as are actually obtained by MBI) of an amount equal to that
which is certified by MBI's independent public accountants to be the increase in
MBI's actual federal and state income tax liability, if any, due on such date as
a result of MBI's accrual into income of the full amount to be paid by
Mallinckrodt under this SECTION 10.01 provided that no such minimum payment
shall be due prior to the first actual commercial Salem ALBUNEX after the Launch
Date. MBI shall advise Mallinckrodt of this amount no later than 30 days prior
to the filing of MBI's return and shall afford Mallinckrodt a reasonable
opportunity to verify the accuracy of such amount. The amounts paid by
Mallinckrodt to MBI shall be distributed by MBI to such employees of MBI as
shall be mutually agreed to by MBI and Mallinckrodt.

         (b) The portion of the $2,500,000 attributable to the accomplishment of
the applicable milestone shall be determined as follows:



                  AMOUNT                           MILESTONE

                                       
         $400,000                         Commencement of initial Phase III of the first
                                          Human Clinical Trials for ALBUNEX as described in
                                          APPENDIX 4 [SECTION 4.01(a)].

         $400,000                         MBI's submission to the FDA either its initial
                                          PMA application or its initial ADA application
                                          for ALBUNEX [SECTION 4.01(b)].

         $400,000                         FDA's acceptance of either MBI's initial PMA
                                          application or initial NDA application for
                                          ALBUNEX [SECTION 4.01(c)]

         $950,000                         FDA's issuance of its initial approval letter for
                                          ALBUNEX with the specifications at least equal to
                                          those set forth in APPENDIX 4 [SECTION 4.01(c)].




         $350,000                         Mallinckrodt's acceptance of MBI's first
                                          commercial shipment of ALBUNEX under ARTICLE 2
                                          [SECTION 4.01(c)].



The foregoing amounts relating to any particular milestone shall be due and
payable so long as the stated milestone is achieved by MBI and the first
commercial sale of ALBUNEX after the Launch Date actually occurs. If any
particular milestone is not achieved, then Mallinckrodt shall have no obligation
to pay the amount related to such milestone. In no event shall Mallinckrodt be
obligated to make payments except with respect to the first instance in which a
particular milestone is achieved and then only if the first commercial sale of
ALBUNEX after the Launch Date actually occurs.

         (c) As each milestone is achieved by MBI, the amount related to such
milestone will accrue and bear interest at the from time to time prime rate of
interest of Citibank, N.A. commencing on the date the related payment under
SECTION 4.01 is due until the amount is paid. Notwithstanding anything in this
SECTION 10.01 to the contrary, Mallinckrodt shall have no obligation to make any
payments under this SECTION 10.01, including interest, unless and until
Mallinckrodt or its Affiliates makes its first commercial sale of ALBUNEX after
the Launch Date.

         (d) Notwithstanding anything to the contrary in this SECTION 10.01, no
MBI employee shall be a third party beneficiary to this SECTION 10.01 and shall
not be entitled to bring suit to enforce this SECTION 10.01.

         10.02 PAYMENTS. MBI acknowledges that Mallinckrodt has previously made
all of the payments that Mallinckrodt was required to make under SECTION 10.01.

                                   ARTICLE 11

                              COMMERCIAL VIABILITY

         11.01 DETERMINATION OF COMMERCIAL VIABILITY. If the commercial
viability of ALBUNEX is seriously jeopardized such that the continued
development of ALBUNEX will not result in a commercially viable product to
Mallinckrodt, then Mallinckrodt shall initiate good faith discussions with MBI
to terminate this Agreement effective with the date such discussions are
initiated, provided however, that if such discussions do not result in
resolution of the matter, they shall be subject to arbitration under ARTICLE 12
to determine if the commercial viability of ALBUNEX is seriously jeopardized
such that the continued development of ALBUNEX will not result in a commercially
viable product to Mallinckrodt. If such arbitrators determine that the
commercial viability of ALBUNEX is so jeopardized, then Mallinckrodt shall have
the immediate right to terminate this Agreement effective with the date such
discussions were initiated. This SECTION 11.01 shall be effective until the FDA
permits the marketing of ALBUNEX for (i) intravenous myocardial profusion
indication and (ii) radiological indications.

                                   ARTICLE 12

                               DISPUTE RESOLUTION

         12.01 BINDING ARBITRATION. Except as otherwise provided in SECTION
12.02, any claim, dispute, question or controversy arising out of or relating to
this Agreement or any amendment or modification hereto, or breach thereof
(undisputed), shall be resolved by arbitration in accordance with the procedures
specified in this Section, which shall be the sole and exclusive procedures for
the resolution of any such disputes; PROVIDED, HOWEVER, that a party, without
prejudice to the procedures specified herein, may institute litigation for the
limited purposes of tolling any applicable statute of limitations or to seek a
temporary restraining order, preliminary injunction or other provisional
judicial relief, if in its sole judgement such action is necessary to avoid
irreparable damage or to preserve the STATUS QUO. Despite such action, the
parties will continue to participate in good faith in the procedures specified
in this Section.




         The arbitration shall be conducted in accordance with the then current
AAA rules for commercial disputes by three independent and impartial arbitrators
from a list provided by AAA and selected as provided herein. The Expedited Rules
of the AAA shall apply. Each party shall select an arbitrator and, then, the two
selected arbitrators shall select a third arbitrator. The arbitration shall be
binding and shall be governed by the United States Arbitration Act, 9 U.S.C.
Sections 1-16, and judgment upon the award rendered by the arbitrators may be
entered by any court having jurisdiction thereof. The place of arbitration shall
be St. Louis County, Missouri. The arbitrators are empowered to award attorneys
fees and expenses in the arbitration. The award of the arbitrators shall be in
writing, and shall state the reasoning on which the award is based.

         Any arbitration shall be confidential. No arbitrator may testify or
produce materials, or be compelled to testify or to produce materials, in any
proceeding related to any dispute.

         All applicable statutes of limitation and defenses based upon the
passage of time shall be tolled while the procedures specified in the Section
are pending. The parties will take such action, if any, required to effectuate
such tolling. This Section is an essential part of this Agreement, is legally
binding upon the parties and may be enforced in any court having jurisdiction
thereof.

         12.02 INJUNCTIONS. The parties recognize and agree that arbitration is
inadequate to enforce (a) the confidential restrictions contained in ARTICLE 5
and the provisions in ARTICLES 2 OR 6 regarding compliance with governmental
health and safety laws and regulations a breach of which would pose an imminent
danger to public health and safety, (b) the provisions requiring arbitration, or
(c) the sale of ALBUNEX by Mallinckrodt in the continents of Europe, Asia,
Africa or Australia other than as and when permitted by this Agreement (each
singularly, an "EVENT"), a violation of any will cause irreparable harm and
unascertainable damages. The parties agree that an aggrieved party shall be
entitled as a matter of right to an injunction from a court of competent
jurisdiction restraining any actual or threatened Event. The right to injunctive
relief shall be in addition to, and not in lieu of, all other rights and
remedies of the aggrieved party under this Agreement, by statute, at law, in
equity or otherwise (such as the right to arbitrate Disputes, requiring an
accounting and repayment of all profits, compensation, remuneration or other
benefits realized in violation of this Agreement).

         12.03 COSTS AND MISSOURI COURTS. The fees and expenses of the
arbitrators shall be shared equally by Mallinckrodt and MBI. Mallinckrodt and
MBI consent to the jurisdiction of the United States District Court for the
Eastern District of Missouri, and if such District Court shall not have
jurisdiction in the matter for any reason, to the jurisdiction of the Circuit
Court of the State of Missouri for the 21st Judicial Circuit, for all purposes
in connection with this Agreement, including entry of judgment relating to any
award of the arbitrators. The arbitration and any award rendered pursuant
thereto shall be governed by, construed and enforced in accordance with the laws
of the State of Missouri.

         12.04 REMEDIES CUMULATIVE. All rights and remedies granted in this
Agreement or available under applicable law shall be deemed concurrent and
cumulative, and not alternative or exclusive remedies, to the full extent
permitted by law and this Agreement. Any party may proceed with any number of
remedies at the same time or in any order. The exercise of any one right or
remedy shall not be deemed a waiver or release of any other right or remedy.

                                   ARTICLE 13

                                 INDEMNIFICATION




         13.01 INDEMNIFICATION BY MBI. MBI shall indemnify and hold harmless
Mallinckrodt against any and all Losses based on or resulting from (i) any
breach of the representations and warranties of MBI contained herein; (ii) any
breach of any warranty by MBI (express or implied) relating to ALBUNEX; (iii)
any or all claims arising from the use of ALBUNEX provided by MBI to
Mallinckrodt pursuant to ARTICLE 2, including, but not limited to, any claim for
death or personal injury or damage or loss of property which shall have been
caused or alleged to have been caused by any negligence on the part of MBI or
its agents, any defect in design, materials or workmanship used in ALBUNEX or
any claim under a theory of strict liability; (iv) any inaccuracies contained in
the Product Literature based on information provided by MBI or any other
information supplied by MBI with ALBUNEX; (v) any governmental recall of ALBUNEX
due to or arising out of an act or omission of MBI, or, (vi) in the event that
ALBUNEX (other than ALBUNEX manufactured by a party other than MBI or an
Affiliate of MBI) is found not to comply with any governmental regulations, for
any costs or expenses incurred by Mallinckrodt to bring ALBUNEX into compliance
with such regulations after consultation with MBI, including, but not limited,
any costs and expenses of securing any required governmental permits.

         13.02 INDEMNIFICATION BY MALLINCKRODT. Mallinckrodt shall indemnify and
hold harmless MBI against any and all Losses sustained by MBI resulting from,
arising out of or connected with (i) any inaccuracy in, breach of or
nonfulfillment of, any representation, warranty, covenant or agreement made by,
or other obligation of, Mallinckrodt contained in this Agreement or (ii) any or
all claims arising from the use of ALBUNEX manufactured by Mallinckrodt or
acquired by Mallinckrodt from a third party (E.G., Hafslund Nycomed AS),
including, but not limited to, any claim for death or personal injury or damage
or loss of property which shall have been caused or alleged to have been caused
(with respect to ALBUNEX so manufactured or acquired) by (A) any negligence on
the part of Mallinckrodt, its agents or supplier or suppliers of ALBUNEX, (B)
any defect in design, materials or workmanship used in such ALBUNEX or (C) any
claim under a theory of strict liability. Notwithstanding the foregoing, if
Mallinckrodt breaches one of the representations or warranties set forth in
SECTION 6.02 concerning manufacturing pursuant to SECTION 13.02(i), Mallinckrodt
shall not be liable for lost profits.

         13.03 PROCEDURES. In the event any third party asserts any claim with
respect to any matter as to which the indemnities in this Agreement relate, the
party against whom the claim is asserted (the Indemnified Party) shall give
prompt notice to the other party (the Indemnifying Party), and the Indemnifying
Party shall have the right at its election to take over the defense or
settlement of the third party claim at its own expense by giving prompt notice
to the Indemnified Party. If the Indemnifying Party does not give such notice
and does not proceed diligently so to defend the third party claim within 30
days after receipt of the notice of the third party claim, the Indemnifying
Party shall be bound by any defense or settlement that the Indemnified Party may
make as to those claims and shall reimburse the Indemnified Party for its Losses
and expenses related to the defense or settlement of the third party claim. The
parties shall cooperate in defending against any asserted third party claims.
For purposes of this ARTICLE 13, the indemnification of the Indemnified Party
shall also include the indemnification of the Indemnified Party's employees,
agents, Affiliates, and third parties performing services for the Indemnified
Party, and the reference to this Agreement includes any certificate, schedule,
list, summary or other information provided or delivered to a party by the
Indemnifying Party or its agents and Affiliates in connection with this
Agreement.

                                   ARTICLE 14

                              TERM AND TERMINATION

         14.01 TERM. Unless sooner terminated pursuant to the provisions of this
Agreement, the term of this Agreement shall continue until the last patent
licensed in SECTION 7.01 expires.

         14.02    TERMINATION.  This Agreement may be terminated:

         (a)  At any time by mutual written consent of MBI and Mallinckrodt; or

         (b) By either party by notice to the other in the event such other
party shall dissolve, cease active business operations or liquidate unless this
Agreement shall have been assigned to a successor or transferee pursuant to




SECTION 16.02, or in the event such other party shall have been determined to be
insolvent by a court of competent jurisdiction, or insolvency or reorganization
proceedings shall have been commenced by such other party, or such proceedings
shall have been brought against such other party and remained undismissed for a
period of 60 days or such other party shall have made a general assignment for
the benefit of creditors, or a receiver of all or substantially all of such
other party's assets shall have been appointed and not discharged within 60
days; or

         (c) By Mallinckrodt, if MBI shall fail to timely make any payment
required by this Agreement and such payment shall not have been made within 30
days after receipt of written demand therefore from Mallinckrodt unless MBI is,
in good faith, contesting or disputing its obligation to make any such payment
or disputing the amount thereof; or

         (d) By MBI, if Mallinckrodt shall fail to timely make any payment
required by this Agreement and such payment shall not have been made within 30
days after receipt of written demand therefore from MBI unless Mallinckrodt is,
in good faith, contesting or disputing its obligation to make any such payment
or disputing the amount thereof; or

         (e) By Mallinckrodt by notice to MBI in the event of a breach or
default by MBI of any material obligation, covenant, agreement, condition,
representation or warranty in this Agreement (other than (i) a breach or default
covered by SECTION 14.02(c) or (ii) a breach or default of any of MBI's
Manufacturing Obligations) if Mallinckrodt shall have given written notice to
MBI of such breach or default and such breach or default shall not have been
remedied within 60 days after receipt of such written notice and, if not
remedied by MBI within the 60 day period, reasonable steps shall not have been
undertaken to remedy such breach or default within such period and shall not
have been diligently pursued thereafter; or

         (f) By MBI by notice to Mallinckrodt in the event of a breach or
default by Mallinckrodt of any material obligation, covenant or agreement in
this Agreement (other than (i) a breach or default covered by SECTION 14.02(d),
or (ii) a breach or default under SECTION 2.14(b)) if MBI shall have given
written notice to Mallinckrodt of such breach or default and such breach or
default shall not have been remedied within 60 days after receipt of such
written notice and, if not remedied by Mallinckrodt with the 60 day period,
reasonable steps shall not have been undertaken to remedy such breach or default
within such period and shall not have been diligently pursued thereafter.

         (g) Notwithstanding Mallinckrodt's continuing authority to manufacture
under SECTION 14.03, if MBI has terminated this Agreement pursuant to SECTIONS
14.02(b), (d) OR (f) and if Mallinckrodt fails to make any undisputed royalty
payment due to MBI under this Agreement when due (and does not cure its default
within 30 days), the manufacturing license granted to Mallinckrodt under SECTION
14.03 shall automatically terminate.

         14.03    SURVIVAL OF MALLINCKRODT LICENSES AND RIGHT OF FIRST REFUSAL.

         (a) If this Agreement terminates by the expiration of its term under
SECTION 14.01, the licenses granted to Mallinckrodt by MBI under this Agreement
shall survive and continue as perpetual, irrevocable, paid-up, royalty-free
non-exclusive licenses.

         (b) If this Agreement terminates by the written consent of the parties
pursuant to SECTION 14.02(a), the licenses granted to Mallinckrodt by MBI under
this Agreement, Mallinckrodt's royalty obligations under SECTION 14.03(d)(3),
Mallinckrodt's right of first refusal under SECTION 9.02, and the other
provisions of this Agreement shall survive as MBI and Mallinckrodt may agree.

         (c) If this Agreement terminates following notice from Mallinckrodt
pursuant to SECTIONS 14.02(b), (c) OR (e):

                  (1) the licenses granted to Mallinckrodt by MBI under this
         Agreement shall survive and continue as perpetual and irrevocable
         paid-up royalty free licenses but shall become nonexclusive on the
         earlier of




         (i) the fifth anniversary of the date that the FDA approves an
         intravenous myocardial perfusion indication of ALBUNEX for sale in the
         United States or (ii) the date this Agreement would otherwise terminate
         under the provisions of SECTION 14.01;

                  (2) Mallinckrodt's right of first refusal under SECTION 9.02
shall survive; and

                  (3) During Phases 1 and 2, Mallinckrodt may recover damages
         resulting from any breach or default of MBI's manufacturing obligations
         which occasions the termination of the Agreement. For purposes of this
         SECTION 14.03(c)(3), damages means actual damages and does not include
         incidental, consequential or punitive damages, but (notwithstanding
         this limitation) does include lost profits on sales of ALBUNEX for the
         period beginning with the occasion of the breach and ending with the
         time Mallinckrodt is lawfully permitted to operate an ALBUNEX
         manufacturing facility capable of producing the Albunex Product in
         question to meet Mallinckrodt's requirements, but in no event beyond
         five years after the date this Agreement is executed.

         (d) If this Agreement terminates following notice from MBI pursuant to
SECTIONS 14.02(b), (d), (f) OR (g):

                  (1) the licenses granted to Mallinckrodt by MBI under this
         Agreement shall survive and continue as perpetual and irrevocable
         licenses but shall become non-exclusive;

                  (2) Mallinckrodt's right of first refusal under SECTION 9.02
shall terminate; and

                  (3) Mallinckrodt may continue to manufacture MBI Licensed
         Products in any quantities. With respect to the exercise of such right,
         Mallinckrodt shall pay to MBI after the date of termination a royalty
         at the rate of 10% of the Net Sales of such products. Mallinckrodt's
         royalty obligation under this Section shall continue until the last
         patent licensed in SECTION 7.01 expires.

         14.04 EFFECT OF TERMINATION. Warranty, confidentiality and
indemnification obligations of the parties shall survive termination.

                                   ARTICLE 15

                                  FORCE MAJEURE

         The obligations of each party to perform under this Agreement shall be
subject to any delays caused by Force Majeure, if and only if the party affected
shall have used reasonable efforts to avoid such Force Majeure and to remedy it
promptly if it shall have occurred.

                                   ARTICLE 16

                                  MISCELLANEOUS

         16.01 RELATIONSHIP OF THE PARTIES. The relationship hereby established
between Mallinckrodt and MBI is solely that of independent contractors and this
Agreement shall not create an agency, partnership, joint venture or
employer/employee relationship, and nothing hereunder shall be deemed to
authorize party to act for, represent or bind the other or any of its Affiliates
except as expressly provided in this Agreement.

         16.02 ASSIGNMENT. This Agreement shall be assignable by either party
only with the written consent of the other party which shall not be unreasonably
withheld, except that (a) either party may assign this Agreement, without such
consent, to the purchaser or transferee of all its assets, or of all the assets
of its business to which this Agreement relates subject to the limitations on
transfer of MBI assets described in ARTICLE 9, (b) Mallinckrodt may assign this
Agreement to an Affiliate with a net worth of not less than $10,000,000 without
the consent of MBI, (c) if permitted by the substantive laws of the State of
Missouri, Mallinckrodt may assign a limited interest in this




Agreement, or a part of this Agreement, as it relates to one or more countries
in any territory, to an Affiliate organized under the laws of the country or one
of the countries in question, and (d) MBI may assign this Agreement to a
subsidiary all of whose stock is owned by MBI. No assignment pursuant to clauses
(b), (c) or (d) shall relieve the assignor from any liability under this
Agreement, and the assignor shall guarantee the assignee's full and prompt
performance of all of its obligations. MBI shall not subcontract or delegate
performance of all or any part of the work called for under this Agreement
without the express prior written consent of Mallinckrodt which consent shall
not be unreasonably withheld except that it may subcontract its manufacturing
obligations under ARTICLE 2 to Mallinckrodt.

         16.03 NOTICE. All notices, communications, demands and payments
required or permitted to be given or made hereunder or pursuant hereto shall be
in writing and sent by receipt by certified or registered mail, postage prepaid,
overnight messenger service, telecopier or personal delivery as follows:

         If to Mallinckrodt:

                  Mallinckrodt Inc.
                  000 XxXxxxxxx Xxxx.
                  Xx. Xxxxx, Xxxxxxxx 00000
                  Attention: President - Mallinckrodt Imaging Group
                  Telecopier: (000) 000-0000

         with a copy to:

                  Mallinckrodt Inc.
                  000 XxXxxxxxx Xxxx.
                  Xx. Xxxxx, Xxxxxxxx 00000
                  Attention: Vice President and General Counsel
                  Telecopier: (000) 000-0000

         If to MBI:

                  Molecular Biosystems, Inc.
                  00000 Xxxxxx Xxxxxx Xxxx
                  Xxx Xxxxx, Xxxxxxxxxx 00000
                  Attention: Chief Operating Officer
                  Telecopier: (000) 000-0000

         with a copy to:

                  Xxxxx X. Xxxxxx, Esq.
                  Xxxxxxx and Colmar
                  Suite 1000
                  000 Xxxxx Xxxxxx Xxxxx
                  Xxxxxxx, Xxxxxxxx 00000
                  Telecopier: (000) 000-0000

All notices sent by certified or registered mail shall be considered to have
been given two business days after being deposited in the mail. All notices sent
by overnight messenger service, telecopier or personal delivery shall be
considered to have been given when actually received by the intended recipient.
Either party may change the address designated by notifying the other party in
writing.

         16.04 GOVERNING LAW. This Agreement is deemed to have been entered into
in the State of Missouri, and its interpretation, construction, and the remedies
for its enforcement or breach are to be applied pursuant to and in accordance
with the substantive laws of the State of Missouri.




         16.05 VALIDITY OF AGREEMENT. If any provision of this Agreement is,
becomes, or is deemed invalid or unenforceable in any jurisdiction, such
provision shall be deemed amended to conform to applicable law so as to be
valid, legal and enforceable in such jurisdiction so deeming. The validity,
legality and enforceability of such provision shall not in any way be affected
or impaired thereby in any other jurisdiction. If such provision cannot be so
amended without materially altering the intention of the parties, it shall be
stricken in the jurisdiction so deeming, and the remainder of this Agreement
shall remain in full force and effect.

         16.06 WAIVER. No waiver of any right under this Agreement shall be
deemed effective unless contained in a writing signed by the party charged with
such waiver, and no waiver of any right arising from any breach or failure to
perform shall be deemed to be a waiver of any future such right or of any other
right arising under this Agreement. No failure on the part of any party to
exercise, and no delay in exercising, any right, power or remedy hereunder shall
operate as a waiver thereof, nor shall an single or partial exercise of any such
right, power or remedy by a party preclude any other or further exercise thereof
or the exercise of any other right, power or remedy. All remedies hereunder are
cumulative and are not exclusive of any other remedies provided by law.

         16.07 ENTIRE AGREEMENT. This Agreement together with (i) the Investment
Agreement dated as of December 7, 1988 between MBI and Mallinckrodt Medical,
Inc. and (ii) the 1995 Investment Agreement set forth and constitute the entire
agreement between the parties hereto with respect to the subject matter hereof,
and supersedes any and all prior agreements, promises, understandings, promises
and representations made by either party to the other concerning the subject
matter hereof and the terms applicable hereto. Mallinckrodt shall not be bound
by and expressly objects to any provisions additional to or at variance with the
terms hereof that may appear in MBI's quotation, acknowledgement, confirmation,
invoice or in any other prior or later communication from MBI to Mallinckrodt
unless such provision is expressly agreed to in writing by Mallinckrodt
referring to this SECTION 16.07 signed by the Chief Executive Officer or a Vice
President of Mallinckrodt. MBI shall not be bound by and expressly objects to
any provisions additional to or at variance with the terms hereof that may
appear in Mallinckrodt's quotation, acknowledgement, confirmation, invoice or in
any other prior or later communication from Mallinckrodt to MBI unless such
provision is expressly agreed to in writing by MBI referring to this SECTION
16.07 signed by the President of MBI.

         16.08 HEADINGS AND REFERENCES; INCORPORATION OF EXHIBITS. In general,
the headings contained in this Agreement are inserted for convenience of
reference only and shall not be a part, control or affect the meaning hereof,
with the exception of the heading "For Historical Purposes Only", which shall
mean that the applicable Section is not an effective part of the Agreement, but
rather, that the Section is included only for its value as an historical
reference. All references herein to Articles and Sections are to the Articles
and Sections of this Agreement. All references herein to Appendices are to the
Appendices hereto, each of which shall be incorporated into and deemed a part of
this Agreement.

         16.09 COUNTERPARTS. This Agreement may be executed in counterparts,
each of which shall be deemed to be an original, but which together shall
constitute one and the same instrument.

         16.10 SETOFF. If within 30 days after receipt of written demand any
amount required to be paid hereunder is not paid and unless the payer is, in
good faith, contesting or disputing its obligation to make any such payment or
disputing the amount thereof, the payee may set-off any and all amounts owed by
the payee to the payor against any and all amounts owed by the payer to the
payee.

         16.11 PAYMENT FOR EQUIPMENT, SUPPLIES, AND INVENTORY. Mallinckrodt
shall purchase from MBI at fair market value all manufacturing equipment and
supplies that it deems necessary, desirable or useful in establishing
Mallinckrodt's Manufacturing Operations. Mallinckrodt will purchase from MBI at
cost all inventories that are useful to Mallinckrodt in manufacturing and
marketing OPTISON, so long as Mallinckrodt was involved in the decision to
purchase such inventories.

         16.12 HSR FILINGS. MBI and Mallinckrodt shall each comply with the
Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act of 1976, as amended (the
"XXXX-XXXXX-XXXXXX ACT"), by filing a pre-merger notification with the




U.S. Department of Justice and the U.S. Federal Trade Commission as promptly as
practicable after signing this Agreement, and shall respond promptly to any
inquires from the Department of Justice or the Federal Trade Commission as a
result of these filings. [FOR HISTORICAL PURPOSES ONLY]

         16.13 EFFECTIVE DATE. To the extent that this Agreement is a
restatement of:

         (a) the Original Distribution Agreement, this Agreement shall be deemed
to have been effective since December 7, 1988;

         (b)      ARDA, this Agreement shall be deemed to have been effective
                  since:

                  (1)      December 7, 1988, if such provision was restated by
                           ARDA,

                  (2)      September 7, 1995, for SECTION 16.12, or

                  (3)      the expiration or termination of the applicable
                           waiting periods under the Xxxx-Xxxxx-Xxxxxx Act, if
                           such provision was changed by ARDA;

         (c) the Nycomed Territory Amendment and the Supplemental Letter, this
Agreement shall be deemed to have been effective since November 6, 1996.

         To the extent that this Agreement is an amendment of ARDA, as amended
by the Nycomed Territory Amendment and the Supplemental Letter, all changes
shall be effective as of the date that this Agreement is signed.

         16.14 RESEARCH QUANTITIES. MBI has received requests from researchers
and clinicians for samples of the First Generation Product. MBI may (but shall
not be required to) fill these requests if doing so is legally permissible as
long as the quantities provided are minimal and intended only for non-clinical
basic research. MBI shall keep Mallinckrodt promptly and fully informed of MBI's
activities in this regard.

         16.15 SALES SUPPORT AGREEMENT. As of the Effective Date, the Sales
Support Agreement between MBI and Mallinckrodt will be rescinded without
liability or obligation to either party.

         16.16 EFFECT OF ARBITRATION ON TERMINATION. This Agreement shall not be
deemed terminated by a party pursuant to SECTIONS 14.02(b), (c), (d), (e), (f)
OR (g) if the other party is disputing the propriety of termination (including
but not limited to whether a cure has been effected or reasonable steps have
been taken to cure and have been diligently pursued, where applicable) and such
party has timely filed or served the appropriate instrument to invoke an
arbitration proceeding under SECTION 12.01 of this Agreement. Such filing or
service shall be deemed timely if it takes place (i) in the case of a SECTION
14.02(b) termination, within 30 days of the notice described in the first clause
of that Section, or (ii) in the case of a SECTION 14.02(c), (d), (e) OR (f)
termination, prior to the expiration of the applicable remedial period. In the
case of a SECTION 14.02(b) termination in which the arbitrators rule in favor of
the party seeking termination, if the termination is based on dissolution,
ceasing business operations, or liquidation, the agreement shall be deemed
terminated; if the termination is based on any other termination event described
in that Section, the unsuccessful party shall have 60 days to dismiss the
proceeding or discharge the assignee, as the case may be. In the case of a
SECTION 14.02(c), (d), (e), or (f) termination, the unsuccessful party shall
have the full applicable remedial period from the date of the arbitrators'
decision to effect a cure, provided that any additional arbitration over whether
the cure is effective in such case shall stay termination for no more than 30
days unless the arbitrators rule otherwise before that period of time expires.
In the case of a SECTION 14.02(c) OR (d) termination, following the arbitrators'
decision the unsuccessful party may not further forestall termination by
claiming a good faith dispute.

         16.17 MALLINCKRODT'S RIGHT TO LEASE OR OPERATE MBI'S FACILITIES. Upon
the Effective Date of this Agreement, Mallinckrodt shall have the immediate and
non-cancelable right to lease any MBI facilities it deems necessary during
Phases 1 and 2 upon commercially reasonable terms to be agreed upon by the
parties. Mallinckrodt shall have the right to ensure that the MBI's
manufacturing facility is staffed and operated in the most cost-effective manner
for producing OPTISON for Mallinckrodt.




         16.18 SEVERABILITY. If any Section (or part thereof) of this Agreement
is found by a court of competent jurisdiction to be contrary to, prohibited by
or invalid under any applicable law, such court may modify such Section (or part
thereof) so, as modified, such Section (or part thereof) will be enforceable and
will to the maximum extent possible comply with the apparent intent of the
parties in drafting such Section (or part thereof). If no such modification is
possible, such Section (or part thereof) shall be deemed omitted, without
invalidating the remaining provisions hereof. No such modification or omission
of a Section (or part thereof) shall in any way affect or impair such Section
(or part thereof) in any other jurisdiction.

         16.19 UNDERTAKING REGARDING SCHEDULES AND APPENDICES. MBI agrees to
provide correct copies of Schedule 6.02(h) and all Appendices to this Agreement
to Mallinckrodt on or prior to October 7, 1999. If such documents are not
delivered to Mallinckrodt by such date, Mallinckrodt may withhold any money due
MBI until such documents have been provided.

                              [signature page next]




IN WITNESS WHEREOF, the parties hereunto have executed this Agreement as to be
effective as described in the foregoing paragraph.

THIS CONTRACT CONTAINS A BINDING ARBITRATION PROVISION WHICH MAY BE ENFORCED BY
THE PARTIES.

                             MOLECULAR BIOSYSTEMS, INC.

                             By: /s/ XXXXX XXXXXXXXXX
                                ------------------------------------------------
                                      Name:    XXXXX XXXXXXXXXX
                                           -------------------------------------
                                      Title:   PRESIDENT & CEO
                                            ------------------------------------
                                      Date:    SEPTEMBER 30, 1999
                                           -------------------------------------

                             MALLINCKRODT INC.

                             By: /s/ XXXXXX X. XXXXXX, XX.
                                ------------------------------------------------
                                      Name:    XXXXXX X. XXXXXX, XX.
                                           -------------------------------------
                                      Title:   BUSINESS DIRECTOR, ULTRASOUND
                                            ------------------------------------
                                      Date:    SEPTEMBER 30, 1999
                                           -------------------------------------
                             MALLINCKRODT INC.

                             By: /s/ XXXXXXX X.XXXXXX
                                ------------------------------------------------
                                      Name:    XXXXXXX X.XXXXXX
                                           -------------------------------------
                                      Title:   PRESIDENT IMAGING GROUP
                                            ------------------------------------
                                      Date:    SEPTEMBER 30, 1999
                                           -------------------------------------




         SCHEDULES AND APPENDICES

         Appendix 1 - Trademark Log

         Appendix 2 - Patent Log

         Appendix 3 - [Omitted]

         Appendix 4 - Current ALBUNEX Indication

         Appendix 5 Optison Product Release Specifications

         Appendix 6 - Certificate of Analysis

         Appendix 7 - Committee Procedures

         Appendix 8 - [Omitted]

         Schedule 6.02(h) - Current Litigation




                                   APPENDIX 1

                                 MBI TRADEMARKS





MBi TRADEMARK LOG 02/11/00




------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------
TRADEMARK          COUNTRY            MATTER        STATUS          APPLICATION          FILING
                                      NUMBER                          NUMBER              DATE
------------------------------------------------------------------------------------------------
                                                                       
ALBUNEX           Xxxxxx Xxxxxx      00000.00      Registered        73/662,872         05/26/87
------------------------------------------------------------------------------------------------
ALBUNEX           Taiwan             24008.41      Registered        83-001344          01/12/94
------------------------------------------------------------------------------------------------
ALBUNEX           Japan (English     24008.43      Registered        63-142487          12/16/88
                  & Katakana)
------------------------------------------------------------------------------------------------
ALBUNEX &         United States      24018.00      Registered        74/397,650         06/04/93
DESIGN
------------------------------------------------------------------------------------------------
ALBUNEX &         Argentina          24018.40      Registered                           06/24/93
DESIGN
------------------------------------------------------------------------------------------------
ALBUNEX &         Brazil             24018.41      Allowed           817434704          03/04/96
DESIGN
------------------------------------------------------------------------------------------------
ALBUNEX &         Canada             24018.42      Registered         731,046           06/15/93
DESIGN
------------------------------------------------------------------------------------------------
ALBUNEX &         Colombia           24018.43      Registered         395,589
DESIGN
------------------------------------------------------------------------------------------------
ALBUNEX &         Costa Rica         24018.44      Pending            85,409            07/05/93
DESIGN
------------------------------------------------------------------------------------------------
ALBUNEX &         Dominican          24018.45      Registered         58608
DESIGN            Republic
------------------------------------------------------------------------------------------------
ALBUNEX &         Ecuador            24018.46      Registered                           06/25/93
DESIGN
------------------------------------------------------------------------------------------------



------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------
PUB. DATE          REG. NO.          REG.         FIRST USE        1ST USE IN          RENEWAL
                                     DATE                           COMMERCE            DATE
------------------------------------------------------------------------------------------------
                                                                    
03/29/88           1,492,866       06/21/88        1/22/87           1/22/87         06/21/2008
------------------------------------------------------------------------------------------------
01/16/96            713670         04/16/96                                          04/15/2006
------------------------------------------------------------------------------------------------
11/15/90           2,329,969       08/30/91                                          08/30/2001
------------------------------------------------------------------------------------------------
02/14/95           1,962,200       04/12/96                         09/12/94         04/12/2006
------------------------------------------------------------------------------------------------
                   1,512,708       03/31/94                                          03/31/2004
------------------------------------------------------------------------------------------------
07/01/97
------------------------------------------------------------------------------------------------
02/23/94             452,831       01/12/96                                          01/12/2011
------------------------------------------------------------------------------------------------
05/22/97             203867        09/29/97                                          09/29/2007
------------------------------------------------------------------------------------------------
                                                                                     09/14/2013
------------------------------------------------------------------------------------------------
[ILLEGIBLE]/06/93    245794                        08/15/94                          08/15/2004
------------------------------------------------------------------------------------------------




MBi TRADEMARK LOG 02/11/00




------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------
TRADEMARK          COUNTRY            MATTER        STATUS            SERIAL            FILING
                                      NUMBER                          NUMBER              DATE
------------------------------------------------------------------------------------------------
                                                                       
ALBUNEX &         El Salvador        24018.47      Registered                           09/20/93
DESIGN
------------------------------------------------------------------------------------------------
ALBUNEX &         Honduras           24018.48      Pending                              06/15/93
DESIGN
------------------------------------------------------------------------------------------------
ALBUNEX &         Mexico*            24018.49      Registered                           07/12/93
DESIGN
------------------------------------------------------------------------------------------------
ALBUNEX &         Panama             24018.54      Registered        076237             06/30/95
DESIGN
------------------------------------------------------------------------------------------------
ALBUNEX &         Peru               24018.50      Registered
DESIGN
------------------------------------------------------------------------------------------------
ALBUNEX &         Venezuela          24018.51      Pending          13116-94            07/20/93
DESIGN
------------------------------------------------------------------------------------------------
ALBUNEX &         Guatemala          24018.52      Pending           97-577             07/09/97
DESIGN
------------------------------------------------------------------------------------------------



------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------
PUB. DATE          REG. NO.          REG.         FIRST USE        1ST USE IN          RENEWAL
                                     DATE                           COMMERCE            DATE
------------------------------------------------------------------------------------------------
                                                                    
02/27/95             171          03/28/96                                           03/26/2006
------------------------------------------------------------------------------------------------

------------------------------------------------------------------------------------------------
07/08/96             509838       11/16/95                                           07/12/2003
------------------------------------------------------------------------------------------------
12/22/95             076237       07/05/95                                           07/05/2005
------------------------------------------------------------------------------------------------
                     033661       12/17/93                                           11/30/2003
------------------------------------------------------------------------------------------------
01/09/95
------------------------------------------------------------------------------------------------

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




* This registration xxxx will expire ten years from the FILING DATE, rather
than the registration date.


                                   APPENDIX 2

                        OPTISON PATENTS AND APPLICATIONS




===============================================================================
WEDNESDAY, OCTOBER 20, 1999           MASTER LIST BY DIVISION           PAGE: 1
===============================================================================
       DIVISION




CASE
NUMBER                      ATTORNEY           DISCLOSURE STATUS    TITLE                                INVENTORS
===================================================================================================================================
                                                                                             
100-0001                                               FILED        PROTEIN ENCAPSULATED INSOLUBLE GAS   XXXXXXXX, K
                                                                    MICROSPHERES AND THEIR PREPARATION   XXXXXXX, K
                    MOLECULAR BIOSYTEMS, INC.                       AND USE AS ULTRASONIC IMAGING        XXXXXX, XXXXXX
                                                                    AGENTS





        SUB                  CASE  APPLICATION    FILING        PATENT   ISSUE       TAX       EXPIRATION
COUNTRY CASE   STATUS        TYPE  NUMBER         DATE          NUMBER   DATE        SCHEDULE  DATE           AGENT     AGENT REF #
===================================================================================================================================
                                                                                       
AU             GRANTED       PCT   72184/94      01-Jul-1994    683485   05-Mar-1998           01-Jul-2014              20010.46
AU       A     PENDING       ORD   53026/98      09-Feb-1998
BR             Abandoned     PCT   PI9406993-0   01-Jul-1994                          PA                      DANNE
BY             Abandoned     PCT   960521        01-Jul-1994                                                            20010.47
CA             PENDING       PCT   2,166,459     01-Jul-1994                                                  XXXXX     20010.49
CN             Abandoned     PCT   94193227.3    01-Jul-1994                          PA
CZ             Abandoned     PCT   PV3508-95     01-Jul-1994                                                            20010.51
DE             Published     EPC   94304902.3    04-Jul-1994
EP             Published     ORD   94304902.3    04-Jul-1994
EP       A     Published     DIV   98116817.2    02-Sep-1998                                                  MOFO      20010.69
ES             Published     EPC   94304902.3    04-Jul-1994
FI             Abandoned     PCT   956312        01-Jul-1994
FR             Published     EPC   94304902.3    04-Jul-1994
GB             Published     EPC   94304902.3    04-Jul-1994
GE             Abandoned     PCT   002218        01-Jul-1994
HU             Abandoned     PCT   P9503977      01-Jul-1994




===============================================================================
WEDNESDAY, OCTOBER 20, 1999              MASTER LIST BY DIVISION        PAGE: 2
===============================================================================
     DIVISION



                                                                                          
IE             PUBLISHED     EPC   94304902.3    04-Jul-1994
IL             Abandoned     ORD   110185        01-Jul-1994
IT             Published     EPC   94304902.3    04-Jul-1994
JP             Granted       PCT   503679/95     01-Jul-1994    2905598   26-May-1999      01-Jul-2014
JP       A     Published     DIV   10-259019     11-Sep-1998                                                            20010.70
KG             ABANDONED     PCT   960317.1      01-Jul-1994
KR             PENDING       PCT   700002/96     01-Jul-1994                                                            20010.58
KZ             Abandoned     PCT   961521.1      01-Jul-1994                                                            20010.57
MX             PENDING       PCT   945059        01-Jul-1994
NL             Published     EPC   94304902.3    04-Jul-1994
NO             Abandoned     PCT   P955351       01-Jul-1994
NZ             GRANTED       PCT   268826        01-Jul-1994    268826    17-Mar-1997      01-Jul-2014
PL             Abandoned     PCT   P312387       01-Jul-1994
RU             Abandoned     PCT   96102021      01-Jul-1994                                                            20010.63
TJ             ABANDONED     PCT   95000260      01-Jul-1994
TM             Abandoned     PCT   296           01-Jul-1994
TW             GRANTED       ORD   83107084      01-Aug-1994    NI-80177  11-Dec-1996      01-Aug-2014
UA             Abandoned     PCT   96020401      01-Jul-1994
US             ABANDONED     ORD   086,717       02-Jul-1993                           LE
US       A     ABANDONED     CON   220,264       30-Mar-1994                           LE
US       B     ABANDONED     CIP   187,656       26-Jan-1994                           LE
US       C     ABANDONED     CIP   290,024       12-Aug-1994                           LE
US       D     Granted       CIP   290,022       12-Aug-1994    5,552,133 03-Sep-1996  LE
US       E     Unfiled       CIP                                                       LE                               20010.24
US       F     Unfiled       CIP                                                       LE                               20010.23
US       G     PENDING       DIV   484,067       06-Jun-1995                           LE




===============================================================================
WEDNESDAY, OCTOBER 20, 1999             MASTER LIST BY DIVISION         PAGE: 3
===============================================================================
     DIVISION



                                                                                          
US       H     Abandoned     DIV   08/483,251    07-Jun-1995                           LE
US       I     ABANDONED     DIV   08/662,983    13-Jun-1996                           LE                               20010.02
US       J     Granted       CON   08/887,493    02-Jul-1997    5,855,865 05-Jan-1999  LE
UZ             ABANDONED     PCT   9600025.2     01-Jul-1994
WO             Published     ORD   US94/07533    01-Jul-1994                           LE                               20010.40
ZA             GRANTED       ORD   94/4810       04-Jul-1994    94/4810  27-Sep-1995       04-Jul-2014                  20010.44




================================================================================
WEDNESDAY, OCTOBER 20, 1999               MASTER LIST BY DIVISION        PAGE: 4
================================================================================
       DIVISION




CASE
NUMBER                      ATTORNEY               DISCLOSURE STATUS    TITLE                                 INVENTORS
===================================================================================================================================
                                                                                                  
100-0002                                                 FILED          INSOLUBLE FLUORINATED GAS             XXXXXXXX, XXXX
                                                                        CONTAINING MICROSPHERES
                                                                        COMPOSED OF FLUORINE-CONTAINING
                  MOLECULAR BIOSYTEMS, INC.                             SHELLS





         SUB                CASE   APPLICATION      FILING       PATENT       ISSUE     TAX        EXPIRATION
COUNTRY  CASE  STATUS       TYPE   NUMBER            DATE        NUMBER       DATE      SCHEDULE   DATE         AGENT   AGENT REF #
===================================================================================================================================
                                                                                        
AT             PENDING      EPC    95927536.3     31-Jul-1995
AU             PENDING      PCT    31536/95       31-Jul-1995
CA             Pending      PCT    2,196,599      31-Jul-1995                                                  XXXXX
CA       D     PENDING      PCT    2,220,706      07-Jun-1996                                                  XXXXX     20021.49
CH             PENDING      EPC    95927536.3     31-Jul-1995
DE             PENDING      EPC    95927536.3     31-Jul-1995
DK             PENDING      EPC    95927536.3     31-Jul-1995
EP             Published    PCT    95927536.3     31-Jul-1995
EP       D     Published    PCT    96921384.2     07-Jun-1996                                                            20021.47
ES             PENDING      EPC    95927536.3     31-Jul-1995
FI             PENDING      EPC    95927536.3     31-Jul-1995
FR             PENDING      EPC    95927536.3     31-Jul-1995
GB             PENDING      EPC    95927536.3     31-Jul-1995
IE             PENDING      EPC    95927536.3     31-Jul-1995
IT             PENDING      EPC    95927536.3     31-Jul-1995
JP             Published    PCT    8-506664       31-Jul-1995                                                            20021.45




================================================================================
WEDNESDAY, OCTOBER 20, 1999         MASTER LIST BY DIVISION           PAGE: 5
================================================================================
      DIVISION



                                                                                        
JP       D     Published    PCT    501846/97      07-Jun-1996                                                            20021.48
KR             PENDING      PCT    700645/97      31-Jul-1995
LU             PENDING      EPC    95927536.3     31-Jul-1995
MC             PENDING      EPC    95927536.3     31-Jul-1995
NL             PENDING      EPC    95927536.3     31-Jul-1995
PT             PENDING      EPC    95927536.3     31-Jul-1995
SE             PENDING      EPC    95927536.3     31-Jul-1995
US             Granted      ORD    284,782        02-Aug-1994    5,562,893    08-Oct-1996   LE    02-Aug-2014
US       A     ABANDONED    ORD    445,706        22-May-1995                               LE
US       B     ABANDONED    ORD    447,254        22-May-1995                               LE
US       C     Granted      CIP    477,510        07-Jun-1995    5,730,955    24-Mar-1998   LE
US       D     PENDING      CIP    660,480        07-Jun-1996                               LE
US       E     PENDING      CIP    09/009,799     20-Jan-1998                               LE                          20021.12
US       F     Pending      ORD    08/972,152     17-Nov-1997                               LE                          20021.01
WO             Published    ORD    9509618        31-Jul-1995                               LE
WO       D     Published    ORD    US96/09547     07-Jun-1996                               LE                          20021.41





================================================================================
WEDNESDAY, OCTOBER 20, 1999       MASTER LIST BY DIVISION               PAGE: 8
================================================================================

      DIVISION




CASE
NUMBER                       ATTORNEY              DISCLOSURE STATUS      TITLE                                    INVENTORS
===================================================================================================================================
                                                                                                       
100-0005                                                  FILED           GAS-EXCHANGE METHOD OF MAKING GAS-       XXXXXXXXX, XX
                                                                          FILLED MICROSPHERES

                   MOLECULAR BIOSYTEMS, INC.




         SUB                CASE   APPLICATION      FILING       PATENT       ISSUE     TAX        EXPIRATION
COUNTRY  CASE  STATUS       TYPE   NUMBER            DATE        NUMBER       DATE      SCHEDULE   DATE         AGENT   AGENT REF #
===================================================================================================================================
                                                                                         
US             Granted      ORD    484,338        07-Jun-1995    5,674,469    07-Oct-1997   LE      07-Jun-2015
US       PR    Abandoned    PRO    60/000,011     08-Jun-1995                               LE
WO             Published    ORD    US96/08878     04-Jun-1996                               LE                            20040.40




================================================================================
WEDNESDAY, OCTOBER 20,1999        MASTER LIST BY DIVISION               PAGE: 11
================================================================================

      DIVISION




CASE
NUMBER                       ATTORNEY              DISCLOSURE STATUS      TITLE                                    INVENTORS
===================================================================================================================================
                                                                                                       
100-0008                                                  FILED           USE OF PRESSURE RESISTANT PROTEIN        XXXXXXXXX, XX
                                                                          MICROSPHERES ENCAPSULATING GASES
                                                                          AS ULTRASONIC IMAGING AGENTS FOR
                                                                          VASCULAR PERFUSION
                     MOLECULAR BIOSYTEMS, INC.





         SUB                CASE   APPLICATION      FILING       PATENT       ISSUE     TAX        EXPIRATION
COUNTRY  CASE  STATUS       TYPE   NUMBER            DATE        NUMBER       DATE      SCHEDULE   DATE         AGENT   AGENT REF #
===================================================================================================================================
                                                                                       
AT             Pending      EPC    97931052.1   05-Jun-1997
AU             Published    ORD    34780/97     05-Jun-1997                             LE                              20043.41
BE             Pending      EPC    97931052.1   05-Jun-1997
CA             Published    ORD    2,253,734    05-Jun-1997                             LE                              20043.42
CH             Pending      EPC    97931052.1   05-Jun-1997
DE             Pending      EPC    97931052.1   05-Jun-1997
DK             Pending      EPC    97931052.1   05-Jun-1997
EP             Pending      PCT    97931052.1   05-Jun-1997                             LE                              20043.
ES             Pending      EPC    97931052.1   05-Jun-1997
FI             Pending      EPC    97931052.1   05-Jun-1997
FR             Pending      EPC    97931052.1   05-Jun-1997
GB             Pending      EPC    97931052.1   05-Jun-1997
GR             Pending      EPC    97931052.1   05-Jun-1997
IE             Pending      EPC    97931052.1   05-Jun-1997
IT             Pending      EPC    97931052.1   05-Jun-1997
JP             Pending      PCT    10-500865    05-Jun-1997




===============================================================================
WEDNESDAY, OCTOBER 20,1999           MASTER LIST BY DIVISION           PAGE: 12
===============================================================================
   DIVISION



                                                                                       
LI             Pending      EPC    97931052.1   05-Jun-1997
LU             Pending      EPC    97931052.1   05-Jun-1997
MC             Pending      EPC    97931052.1   05-Jun-1997
NL             Pending      EPC    97931052.1   05-Jun-1997
PT             Pending      EPC    97931052.1   05-Jun-1997
SE             Pending      EPC    97931052.1   05-Jun-1997
US             Allowed      ORD    08/1665,028  07-Jun-1996                             LE
WO             Published    ORD    US97/09782   05-Jun-1997                             LE                              20043.40





===============================================================================
WEDNESDAY, OCTOBER 20,1999          MASTER LIST BY DIVISION             PAGE:14
===============================================================================

      DIVISION




CASE
NUMBER                       ATTORNEY              DISCLOSURE STATUS      TITLE                                    INVENTORS
===================================================================================================================================
                                                                                                       
100-0010                                                  FILED           CONTRAST AGENTS FOR ULTRASONIC           XXXXXXXXX
                                                                          IMAGING





                     XXXXXX XXXXXXXXX


         SUB                CASE   APPLICATION      FILING       PATENT      ISSUE       TAX        EXPIRATION
COUNTRY  CASE  STATUS       TYPE   NUMBER            DATE        NUMBER      DATE        SCHEDULE   DATE         AGENT   AGENT REF #
===================================================================================================================================
                                                                                        
AT             GRANTED      PCT    9004/84        26-Jan-1984    397034       25-Jan-1994           15-Jun-2011          20029.42
AT        A    GRANTED      EPC    86116943.1     05-Dec-1986    0224934      29-Jan-1992   OE      05-Dec-2006          20030.44
AU             GRANTED      PCT    25769/84       26-Jan-1984    571863       16-Aug-1988           26-Jan-2004          20029.41
AU        A    GRANTED      ORD    66097/86       04-Dec-1986    575735       22-Nov-1988           04-Dec-2006          20030.40
BE             GRANTED      EPC    84901032.7     26-Jan-1984    0135563      29-Aug-1990           26-Jan-2004          20029.43
BE        A    GRANTED      EPC    86116943.1     05-Dec-1986    0224934      29-Jan-1992           05-Dec-2006          20030.46
BR             ABANDONED    ORD    XX0000000-3    26-Jan-1984                               PA                           20029.44
CA             Granted      ORD    446,243        27-Jan-1984    1,221,759    12-May-1987           12-May-2004  XXXXX   20029.45
CA        A    Granted      ORD    524,419        03-Dec-1986    1,274,773    02-0ct-1990   OL      02-Oct-2007  XXXXX   20030.41
CH        A    GRANTED      EPC    86116943.1     05-Dec-1986    0224934      29-Jan-1992           05-Dec-2006          20030.47
DE             GRANTED      PCT    P3490013.6     26-Jan-1984    3490013      15-Mar-1990           26-Jan-2004          20029.47
DE        A    GRANTED      EPC    86116943.1     05-Dec-1986    3683735      29-Jan-1992           05-Dec-2006          20030.45
EP             GRANTED      PCT    84901032.7     26-Jan-1984    0135563      29-Aug-1990           26-Jan-2004          20030.
EP        A    GRANTED      ORD    86116943.1     05-Dec-1986    0224934      29-Jan-1992           05-Dec-2006          20030.43
FR             Granted      ORD    8401207        26-Jan-1984    2541108      03-Apr-1992           26-Jan-2004          20029.46
FR        A    GRANTED      EPC    86116943.1     05-Dec-1986    0224934      29-Jan-1992           05-Dec-2006          20030.48







---------------------------------------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------------------------------------
WEDNESDAY, OCTOBER 20, 1999                       MASTER LIST BY DIVISION                                    PAGE: 15
---------------------------------------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------------------------------------

       DIVISION

                                                                         
GB             GRANTED      PCT    8423446        26-Jan-1984    2143327     22-Oct-1986            26-Jan-2004
GB        A    GRANTED      EPC    86116943.1     05-Dec-1986    0224934     29-Jan-1992            00-Xxx-0000
XX             Xxxxxxxxx    XXX    00000          26-Jan-1984
IL             XXXXXXX      XXX    00000          26-Jan-1984    70784       01-Apr-1988            26-Jan-2004
IT        A    GRANTED      EPC    86116943.1     05-Dec-1986    0224934     29-Jan-1992    EP      05-Dec-2006
JP             GRANTED      PCT    501032/84      26-Jan-1984    1598465     28-Jan-1991            26-Jan-2004
JP        A    GRANTED      ORD    289108/86      05-Dec-1986    1677653     13-Jul-1992            05-Dec-2006
NL             GRANTED      PCT    8420041        26-Jan-1984    191079      17-Dec-1994            26-Jan-2004
NL        A    GRANTED      EPC    86116943.1     05-Dec-1986    0224934     29-Jan-1992            05-Dec-2006
SE             GRANTED      PCT    8404797-6      26-Jan-1984    8404797-6   16-Jul-1992            26-Jan-2004
SE        A    GRANTED      EPC    86116943.1     05-Dec-1986    0224934     29-Jan-1992    EP      05-Dec-2006
US             Granted      ORD    461,664        27-Jan-1983    4,572,203   25-Feb-1986    LE      25-Feb-2003
US        A    Granted      CIP    805,975        05-Dec-1985    4,718,433   12-Jan-1988    LE
US        B    Granted      CIP    103,837        01-Oct-1987    4,774,958   04-Oct-1988    LE
WO             Published    ORD    US84/00135     26-Jan-1984                               LE






---------------------------------------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------------------------------------
WEDNESDAY, OCTOBER 20, 1999                           MASTER LIST BY DIVISION                                          PAGE: 16
---------------------------------------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------------------------------------

      DIVISION

CASE
NUMBER                       ATTORNEY              DISCLOSURE STATUS      TITLE                                    INVENTORS
---------------------------------------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------------------------------------
                                                                                                       
100-0011                                                  FILED           CONCENTRATED STABILIZED MICRO-           WESTKAEMPER,
                                                                          BUBBLE TYPE ULTRASONIC IMAGING           XXXXXX, XXX
                                                                          AGENT

                    MOLECULAR BIOSYTEMS, INC.


         SUB              CASE   APPLICATION     FILING      PATENT      ISSUE       TAX        EXPIRATION
COUNTRY  CASE  STATUS     TYPE   NUMBER           DATE       NUMBER      DATE        SCHEDULE   DATE         AGENT   AGENT REF #
---------------------------------------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------------------------------------

                                                                                    
AT             GRANTED    EPC    88120371.5    06-Dec-1988   0324938     18-Nov-1993    OE      06-Dec-2008
AU             GRANTED    ORD    25881/88      25-Nov-1988   603718      19-Mar-1991            25-Nov-2008
BE             GRANTED    EPC    88120371.5    06-Dec-1988   0324938     18-Nov-1993            06-Dec-2008
CA             Granted    ORD    581,985       02-Nov-1988   1,325,590   28-Dec-1993    OL      28-Dec-2010  XXXXX
XX             GRANTED    EPC    88120371.5    06-Dec-1988   0324938     18-Nov-1993            06-Dec-2008
CN             GRANTED    ORD    88105824.6    28-Dec-1988   88105824.6  07-Apr-1995    OL      28-Dec-2003
DE             GRANTED    EPC    88120371.5    06-Dec-1988   P3885730.8  18-Nov-1993            06-Dec-2008
DK             PENDING    ORD    7216/88       23-Dec-1988
EP             GRANTED    ORD    88120371.5    06-Dec-1988   0324938     18-Nov-1993            06-Dec-2008            28060.00
FI             XXXXXXX    XXX    000000        28-Dec-1988   93698       26-May-1995            28-Dec-2008
FR             GRANTED    EPC    88120371.5    06-Dec-1988   0324938     18-Nov-1993            06-Dec-2008
GB             GRANTED    EPC    88120371.5    06-Dec-1988   0324938     18-Nov-1993            06-Dec-2008
IE             GRANTED    ORD    3127/88       14-Oct-1988   61591       16-Nov-1994    OL      14-Oct-2008            20018.56
IL             XXXXXXX    XXX    00000         13-Oct-1988   88039       16-Oct-1992            13-Oct-2008
IT             GRANTED    EPC    88120371.5    06-Dec-1988   0324938     18-Nov-1993    EP      06-Dec-2008
JP             Granted    ORD    63-323826/88  23-Dec-1988   2137979     21-Aug-1998            23-Dec-2008            20018.48







---------------------------------------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------------------------------------
WEDNESDAY, OCTOBER 20, 1999                           MASTER LIST BY DIVISION                                         PAGE: 17
---------------------------------------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------------------------------------

        DIVISION

                                                                              
KR             XXXXXXX       XXX    00000/00       28-Dec-1988   106494      22-Oct-1996              01-May-2011
LU             GRANTED       EPC    88120371.5     06-Dec-1988   0324938     18-Nov-1993              06-Dec-2008
NL             GRANTED       EPC    88120371.5     06-Dec-1988   0324938     18-Nov-1993              06-Dec-2008
NO             GRANTED       ORD    88/5796        28-Dec-1988   176826      14-Jun-1995              28-Dec-2008
SE             GRANTED       EPC    88120371.5     06-Dec-1988   0324938     18-Nov-1993     EP       06-Dec-2008
TW             GRANTED       ORD    77109129       29-Dec-1988   NI-37100    15-Jun-1990     OL       01-Feb-2005
US             Granted       ORD    139,576        29-Dec-1987   4,844,882   04-Jul-1989     LE       29-Dec-2007






---------------------------------------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------------------------------------
WEDNESDAY, OCTOBER 20,1999                              MASTER LIST BY DIVISION                                       PAGE: 19
---------------------------------------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------------------------------------

      DIVISION

CASE
NUMBER                       ATTORNEY              DISCLOSURE STATUS      TITLE                                    INVENTORS
---------------------------------------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------------------------------------
                                                                                                       
100-0013                                                  FILED           CONTINUOUS SONICATION METHOD FOR         XXXXX, D
                                                                          PREPARING PROTEIN ENCAPSUALTED           XXXXX, G
                    MOLECULAR BIOSYTEMS, INC.                             MICROBUBBLES





         SUB             CASE  APPLICATION     FILING       PATENT      ISSUE       TAX        EXPIRATION
COUNTRY  CASE  STATUS    TYPE  NUMBER           DATE        NUMBER      DATE        SCHEDULE   DATE         AGENT   AGENT REF #
---------------------------------------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------------------------------------

                                                                                   
AT             GRANTED   EPC   89116982.3    13-Sep-1989    0359246     24-Mar-1993    OE      13-Sep-2009
AU             GRANTED   ORD   41312/89      13-Sep-1989    617215      18-Mar-1992            13-Sep-2009
BE             GRANTED   EPC   89116982.3    13-Sep-1989    0359246     24-Mar-1993            13-Sep-2009
CA             Granted   ORD   610,631       07-Sep-1989    1,337,286   10-Oct-1995    OL      10-Oct-2012  XXXXX
XX             GRANTED   EPC   89116982.3    13-Sep-1989    0359246     24-Mar-1993            13-Sep-2009
DE             GRANTED   EPC   89116982.3    13-Sep-1989    68905557    24-Mar-1993            13-Sep-2009
DK             PENDING   ORD   4511/89       13-Sep-1989
EP             GRANTED   ORD   89116982.3    13-Sep-1989    0359246     24-Mar-1993            13-Sep-2009
ES             GRANTED   EPC   89116982.3    13-Sep-1989    0359246     24-Mar-1993    EP      13-Sep-2009
FI             GRANTED   ORD   89/4335       13-Sep-1989    95872       10-Apr-1996            13-Sep-2009
FR             GRANTED   EPC   89116982.3    13-Sep-1989    0359246     24-Mar-1993            13-Sep-2009
GB             GRANTED   EPC   89116982.3    13-Sep-1989    0359246     24-Mar-1993            13-Sep-2009
GR             Granted   EPC   89116982.3    13-Sep-1989    3007483     24-Mar-1993            13-Sep-2009
IE             GRANTED   ORD   2837/89       04-Sep-1989    62602       00-Xxx-0000    XX      00-Xxx-0000
XX             XXXXXXX   XXX   00000         11-Sep-1989    91593       16-Jun-1993            11-Sep-2009
IT             GRANTED   EPC   89116982.3    13-Sep-1989    0359246     24-Mar-1993    EP      13-Sep-2009







---------------------------------------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------------------------------------
WEDNESDAY, OCTOBER 20,1999                              MASTER LIST BY DIVISION                                       PAGE: 20
---------------------------------------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------------------------------------
      DIVISION

                                                                       
JP             GRANTED   ORD   237390/89     14-Sep-1989    1988539     08-Nov-1995            14-Sep-2009
KR             XXXXXXX   XXX   00000/00      12-Sep-1989    135754      16-Jan-1998            16-Jan-2013
LU             GRANTED   EPC   89116982.3    13-Sep-1989    0359246     24-Mar-1993            13-Sep-2009
NL             GRANTED   EPC   89116982.3    13-Sep-1989    0359246     24-Mar-1993            13-Sep-2009
NO             GRANTED   ORD   89/3671       13-Sep-1989    176871      14-Jun-1995            13-Sep-2009
SE             GRANTED   EPC   89116982.3    13-Sep-1989    0359246     24-Mar-1993    EP      13-Sep-2009
TW             GRANTED   ORD   78106958      08-Sep-1989    NI-45087    18-Jun-1991    OL      21-Feb-2006
US             Granted   ORD   244,844       14-Sep-1988    4,957,656   18-Sep-1990    LE      14-Sep-2008






---------------------------------------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------------------------------------
WEDNESDAY, OCTOBER 20,1999                              MASTER LIST BY DIVISION                                       PAGE: 23
---------------------------------------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------------------------------------

      DIVISION

CASE
NUMBER                       ATTORNEY              DISCLOSURE STATUS      TITLE                                    INVENTORS
---------------------------------------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------------------------------------
                                                                                                       
100-0015                                                  FILED           GAS-FILLED AMINO ACID BLOCK CO-          HASHIMOTO, Y
                                                                          POLYMER MICROSPHERES USEFUL AS           XXXXXXX, XXXX
                                                                          ULTRASOUND CONTRAST AGENTS
                     MOLECULAR BIOSYTEMS, INC.




         SUB               CASE  APPLICATION    FILING      PATENT      ISSUE       TAX        EXPIRATION
COUNTRY  CASE  STATUS      TYPE  NUMBER          DATE       NUMBER      DATE        SCHEDULE   DATE         AGENT   AGENT REF #
---------------------------------------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------------------------------------
                                                                                   
CA             Abandoned   PCT   2,220,712     04-Jun-1996                                                  XXXXX    20032.42
EP             Abandoned   PCT   96917197.4    04-Jun-1996                                                           20032.41
JP             Abandoned   PCT   501391/97     04-Jun-1996                                                           20032.43
US             Granted     ORD   08/486,770    07-Jun-1995  5,820,850   13-Oct-1998    LE      13-Oct-2015           20032.00
US        PR   Abandoned   PRO   60/000,080    08-Jun-1995                             LE
WO             Abandoned   ORD   US96/08947    04-Jun-1996                             LE                            20032.40








-----------------------------------------------------------------------------------------------------------------------------------
-----------------------------------------------------------------------------------------------------------------------------------
WEDNESDAY, OCTOBER 20, 1999           MASTER LIST BY DIVISION                                                              PAGE: 26
-----------------------------------------------------------------------------------------------------------------------------------
-----------------------------------------------------------------------------------------------------------------------------------
      DIVISION

CASE
NUMBER                       ATTORNEY              DISCLOSURE STATUS      TITLE                                    INVENTORS
-----------------------------------------------------------------------------------------------------------------------------------
-----------------------------------------------------------------------------------------------------------------------------------
                                                                                                     
100-0018                                                  FILED           PROCESS FOR MAKING GAS FILLED            HASHIMOTO
                                                                          MICROSPHERES CONTAINING A LIQUID
                                                                          HYDROPHOBIC BARRIER
                      MOLECULAR BIOSYTEMS, INC.





         SUB                CASE   APPLICATION      FILING       PATENT      ISSUE       TAX        EXPIRATION
COUNTRY  CASE  STATUS       TYPE   NUMBER            DATE        NUMBER      DATE        SCHEDULE   DATE         AGENT   AGENT REF #
-----------------------------------------------------------------------------------------------------------------------------------
-----------------------------------------------------------------------------------------------------------------------------------
                                                                                       
US             Unfiled      ORD                                                            LE
US       PR    Pending      PRO    60/000,777     08-Jun-1995                              LE





                                   Appendix 4

                           Current ALBUNEX Indication

         Opacification of right and left xxxxxxxx of the heart after intravenous
administration.



                                   Appendix 5

                     Optison Product Release Specifications

1. PURPOSE

         1.1.     Define the final product tests required to assure safety and
                  uniformity of Optison-Registered Trademark-.

         1.2.     Define the method and sample amounts for each required test.

         1.3.     Define the internal specifications for Optison-Registered
                  Trademark-.

2.  SCOPE

         2.1.     All Optison-Registered Trademark- lots produced must be
                  subjected to the tests and evaluated against the internal
                  specifications described in this SOP.

                  2.1.1.   The internal specifications are the most restrictive
                           regulatory specifications approved by the countries
                           to which Optison-Registered Trademark- has been
                           submitted.




                                    2.1.1.1. Optison-Registered Trademark- lots
                                             falling outside of the internal
                                             specifications may be dispositioned
                                             for a particular country providing
                                             that the regulatory specifications
                                             of that country are met. The final
                                             lot disposition will be determined
                                             per SOP D-001 after a formal
                                             investigation of any results
                                             falling outside internal
                                             specifications. This investigation
                                             will be conducted per SOP C-064.

3.   RESPONSIBILITY

         3.1.     Quality Assurance will be responsible for sampling and
                  distributing all samples for testing.

         3.2.     Quality Assurance will be responsible for submitting LAL and
                  Sterility samples to the QC Department or the Shipping
                  Department as applicable. Safety samples (5 vials or
                  equivalent volume to supply 15 mL minimum) will be submitted
                  to the Shipping Department.

                  3.2.1.   Assure that all samples are labeled with the lot
                           number.

                  3.2.2.   Assure that the lot number, a purchase order number
                           and the number of vials submitted for each test are
                           documented on the NAMSA test request or the QC Test
                           Request Form (Form #0076, SOP C-045) as applicable.

                  3.2.3.   The QC Department and NAMSA will summarize test
                           results in their respective report formats.

         3.3.     Quality Control will be responsible for performing the test as
                  required per this SOP.

         3.4.     The QC Manager/Designee will be responsible for reviewing the
                  data generated.




         3.5.     Quality Assurance will review all data for completeness and
                  ensure all internal specifications are met for each vial
                  tested before the lot is released. If all internal
                  specifications are not met, an investigation per SOP C-064
                  will be conducted prior to determining the final lot
                  disposition. (Refer to SOP D-001).

4.  MATERIALS

         4.1.     Not Applicable.

5.  EQUIPMENT

         5.1.     Not Applicable.

6.  SAFETY

         6.1.     Not Applicable.

7.  SET-UP

         7.1.     Not Applicable.

8.  PROCEDURE

         8.1.     After the Filling Operation is completed, Quality Assurance
                  personnel will withdraw at random the appropriate number of
                  vials from the lot and distribute all samples for appropriate
                  testing as described in Illustration 10.1. These sample vials
                  will be withdrawn from the trays filled at the beginning,
                  middle and end of the Filling Operation.

                  8.1.1.   Quality Assurance personnel will label each sample
                           vial with the following information at a minimum: QC
                           Sample, Lot number, product name, vial number, and
                           the tray number from which the vial is withdrawn.




                  8.1.2.   Following the Filling Operation completion, Quality
                           Assurance personnel will deliver 10 sample vials to
                           QC Microbiology for Bacterial Endotoxin testing; 10%
                           of the lot (rounded to the highest even number) with
                           a minimum of 2 and a maximum of 20 sample vials to QC
                           Microbiology for sterility testing; and 16 sample
                           vials to QC Chemistry for physical/chemical testing
                           (fill volume, protein concentration, quantitation and
                           identification of OFP.

                  8.1.3.   After a minimum of 48 hours following the filling
                           operation completion, Quality Assurance personnel
                           will deliver 60 sample vials to QC Chemistry for
                           chemical testing (Headspace Analysis of OFP, Xxxxxxx
                           Analysis and pH).

                  8.1.4.   Following visual inspection per SOP K-077, and AQL
                           per SOP D-055, Quality Assurance will pull 3 vials
                           and send to QC Chemistry for Physical Appearance
                           testing.

         8.2.     EUROPEAN SAMPLES

                  8.2.1.   As required for lots designated for European
                           distribution, Quality Assurance personnel will
                           withdraw at random the appropriate number of vials
                           from the lot as indicated below. These sample vials
                           will be held in QA quarantine until such time that
                           they are scheduled for European shipment.

                                    8.2.1.1. Two sets of 20 vials each will be
                                             pulled evenly from first to last
                                             tray for Sterility and will be
                                             labeled as "Optison-Registered
                                             Trademark-", "QC Sample", with the
                                             part number, lot number and vial
                                             numbers 1 through 20 in the order
                                             they were pulled.




                                    8.2.1.2. Another 100 sample vials will be
                                             pulled evenly from first to last
                                             tray and labeled as
                                             "Optison-Registered Trademark-",
                                             "QC Sample", with part number and
                                             lot number.

                  8.2.2.   A Certificate of Analytical Results will be provided
                           with the samples listing the Density Value obtained
                           per SOP D-127.

         8.3.     Quality Assurance personnel will document the distribution on
                  the Material Accountability Form, Form #0215 (SOP K-007).

         8.4.     GROWTH PROMOTION TESTING

                  8.4.1.   Growth promotion is performed on all lots of
                           sterility test media per current USP before sterility
                           testing of final product vials is performed.

                  8.4.2.   Results: The test media is satisfactory if there is
                           evidence of growth in all inoculated media containers
                           within 7 days.

         8.5.     STERILITY TESTING

                  8.5.1.   Submit samples to QC Microbiology and/or NAMSA
                           (Irvine, CA).

                  8.5.2.   Samples will be tested in-house as per SOP D-061,
                           which is based on current USP Test Method. Samples
                           will be tested by NAMSA per the current USP Test
                           Method.

                  8.5.3.   If growth is observed, notify the QC Manager.

         8.6.     BACTERIAL ENDOTOXINS

                  8.6.1.   Submit samples to QC lab for Bacterial Endotoxin
                           testing.




                  8.6.2.   Samples will be tested per SOP D-117. SOP D-117 is
                           based on the current USP Test Method.

                  8.6.3.   Current USP test method required.

                  8.6.4.   If samples are submitted to NAMSA, USP Rabbit Pyrogen
                           testing must be requested.

         8.7.     SAFETY TEST

                  8.7.1.   Submit samples to NAMSA as described in Illustration
                           10.1.

                  8.7.2.   NAMSA will perform the test per the current USP Test
                           Method.

         8.8.     PHYSICAL APPEARANCE

                  8.8.1.   Perform physical appearance inspection of vials per
                           SOP D-129. The result obtained for each vial must
                           meet the specification. Document the inspection and
                           include in the package.

                  8.8.2.   Per SOP D-129, a photograph will be taken to
                           determine microsphere shape and will be included in
                           the test result packet.

         8.9.     PH AND XXXXXXX COUNT

                  8.9.1.   Perform pH per SOP D-004.

                  8.9.2.   The pH may be performed on ten of the vials used for
                           the Xxxxxxx Count; ensure the samples are submitted
                           for Xxxxxxx Count first. Each vial should be analyzed
                           for pH separately. The result obtained for each
                           vial must meet the sepcification. The final result
                           for the lot will be reported as an average of the
                           vials. Photocopy the data and attach the original as
                           well as the copy and include in the package.




                  8.9.3.   Perform Xxxxxxx Analysis per SOP D-133. Include the
                           raw data with the Excel spreadsheet in the package.
                           The result obtained for each vial must meet the
                           specification. The final result for the lot will be
                           reported as an average of the 30 vials.

                     8.9.3.1. Evaluate the Xxxxxxx concentration

         8.10.    FILL VOLUME

                  8.10.1.  Determine fill volume per SOP D-127. Document the
                           volumes and include in the package. The result for
                           each vial must meet the specification. The final
                           result for the lot will be reported as an average of
                           the 10 vials.

         8.11.    OFP HEAD SPACE ANALYSIS

                  8.11.1.  Perform as per SOP D-134. Include the raw data in the
                           package. The result obtained for each vial must meet
                           the specification. The final result for the lot will
                           be reported as an average of the 30 vials.

         8.12.    PROTEIN CONCENTRATION

                  8.12.1.  Perform as per SOP D-131. Photocopy the data and
                           attach the original as well as the copy and include
                           in the package. SOP D-131 will be performed in
                           triplicate for each vial. The triplicates will be
                           averaged to obtain the individual vial result. The
                           result obtained for each vial must meet the
                           specification. The final result for the lot will be
                           reported as an average of the three vials.




         8.13.    IDENTIFICATION AND QUANTITATION OF OFP

                  8.13.1.  Perform as per SOP D-132. Include the worksheet in
                           the package. The result obtained for each vial must
                           be plus or minus 5% of average OFP reference
                           retention time.

                  8.13.2.  The mean of the vials must be 0.22 plus or minus 0.11
                           mg/mL (0.11 - 0.33), and all vials are within plus or
                           minus 0.05 mg/mL of the mean value.

         8.14.    After Sections 8.8 - 8.13. are completed, submit results to QC
                  Manager/Designee for review.

         8.15.    Record the lot results on Form #0367 (Attachment I).

         8.16.    If an out-of-specification result is obtained for any of the
                  tests, follow SOP C-062, unless otherwise specified in the
                  test method.

         8.17.    All data for the lot will be submitted to Document Control
                  after QA review.

9.  SHUTDOWN

         9.1.     Not Applicable.




10.  ILLUSTRATION/DRAWINGS

         10.1.    Tests and Internal Specifications



---------------------------------- ---------------------------- ----------------------------- ------------------------------------
TEST                               PERFORMED BY                 VIALS REQUIRED                INTERNAL SPECIFICATIONS
---------------------------------- ---------------------------- ----------------------------- ------------------------------------
                                                                                     
USP STERILITY [71]                 In-House                     10% of lot rounded to the     Sterile
                                   (SOP D-061) or NAMSA         highest even number.
                                                                minimum 2 maximum 20.
---------------------------------- ---------------------------- ----------------------------- ------------------------------------
USP Bacterial Endotoxins Test      In-House                     10                            Less than or equal to 0.5 Eu/mL
[85]                               (SOP D-117) or NAMSA
---------------------------------- ---------------------------- ----------------------------- ------------------------------------
USP GENERAL SAFETY [88]            NAMSA                        5 (or enough equivalent       No death or other apparent
                                                                volume to supply 15 mLs       signs of toxicity
                                                                minimum)
---------------------------------- ---------------------------- ----------------------------- ------------------------------------
pH (total of 10 vials)             In-House (SOP D-004)         10*                           pH 6.4 - 7.4
---------------------------------- ---------------------------- ----------------------------- ------------------------------------
XXXXXXX ANALYSIS                   In-House (SOP D-133)         30                            Concentration:
                                                                Release testing to be           5.8 - 5.0 x 10 degree/mL
                                                                performed a minimum of 48     Mean Diameter:
                                                                hours after fill.               3.0 - 4.5um
                                                                                              Size Distribution.
                                                                                               - Not less than 80% are less
                                                                                                 than or equal to 7um
                                                                                               - Not less than 93.7% are less
                                                                                                 than or equal to 10um
                                                                                               - Not less than 96% are less
                                                                                                 than or equal to 14um
                                                                                               - Not less than 99% are less
                                                                                                 than or equal to 21um
                                                                                               - Average value of 0.0% with
                                                                                                 no vial greater than 0.2%
                                                                                                 for 31 33um
---------------------------------- ---------------------------- ----------------------------- ------------------------------------
CONTENT UNIFORMITY                 In-House (SOP C-094)         Data from Xxxxxxx analysis    Less than or equal to 1 vial
                                                                to be used                    outside of Average plus or minus 15%
                                                                                              with RSD less than or equal to 6%
                                                                                              0 vials outside of Average plus or
                                                                                              minus 25% with RSD less than or
                                                                                              equal to 7.8%
---------------------------------- ---------------------------- ----------------------------- ------------------------------------
PHYSICAL APPEARANCE                In-House (SOP D-123)         3                             Undisturbed: Compact,
                                                                Release testing to be         well-defined Microsphere layer
                                                                performed after visual        above a clear, infranatant
                                                                inspection of final           colorless to yellow; free from
                                                                containers (SOP K-077).       extraneous particles. After
                                                                                              inverting: opaque & white
---------------------------------- ---------------------------- ----------------------------- ------------------------------------
Microsphere Identity               In-House (SOP D-123)         3                             Spherical, non-aggregated
                                                                                              microsphere
---------------------------------- ---------------------------- ----------------------------- ------------------------------------
Fill Volume 3.0 mL vials           In-House (SOP D-127)         10                            3.0 mL Label Claim:(3.0 - 3.8mL)
---------------------------------- ---------------------------- ----------------------------- ------------------------------------
Headspace Analysis of              In-House (SOP D-134)         30                            Greater than or equal to 60%
Octafluoropropane (OFP)                                         Release testing to be         Headspace is OFP
                                                                performed a minimum of 48
                                                                hours after fill.
---------------------------------- ---------------------------- ----------------------------- ------------------------------------
Protein Concentration              In-House (SOP D-131)         3                             E - 11 mg/mL
---------------------------------- ---------------------------- ----------------------------- ------------------------------------
OFP Identification                 In-House (SOP D-132)         3                             Sample retention time must be
                                                                                              plus or minus 5% of average
                                                                                              OFP reference retention time.
---------------------------------- ---------------------------- ----------------------------- ------------------------------------
Octafluoropropane Content in       In-House (SOP D-132)         3                             Mean 0.22 plus or minus
Suspension Layer                                                                              0.11mg/mL (0.11-0.33), and all
                                                                                              vials are within plus or minus
                                                                                              0.05mg/mL of the mean value.
---------------------------------- ---------------------------- ----------------------------- ------------------------------------


NOTE: *Ten vials from the post Xxxxxxx Counting Analysis may be used.


11.  REFERENCES

         11.1.    SOP C-045 - QC Test Request Procedure

         11.2.    SOP C-062 - Retest Procedure of Out-of-Specification
                  Laboratory Data

         11.3.    SOP C-064 - Failure Investigation Procedure

         11.4.    SOP C-094 - Optison-Registered Trademark- Content Uniformity
                  Determination

         11.5.    SOP D-001 - Interim Product Review/Release and Final Product
                  Release Procedure

         11.6.    SOP D-004 - Operation of the Corning 245 pH Meter for pH
                  Determination of Sample Solutions

         11.7.    SOP D-055 - Inspection of Manufacturing Goods

         11.8.    SOP D-061 - Sterility Testing of Albumin (Human) Products

         11.9.    SOP D-117 - Routine Kinetic Quantitative Chromogenic LAL
                  (K-QCL) Bacterial Endotoxin Testing (BET)

         11.10.   SOP D-127 - Determination of Volume for Final Containers

         11.11.   SOP D-129 - Physical Appearance of Optison-Registered
                  Trademark- Microspheres in Filled Vials

         11.12.   SOP D-131 - Bromocresol Green Determination (BCG) of Albumin
                  Concentrations

         11.13.   SOP D-132 - Identification and Quantitation of OFP
                  (Octafluoropropane) in Optison-Registered Trademark-
                  Microspheres

         11.14.   SOP D-133 - Particle Counting of Optison-Registered Trademark-
                  Microspheres on the Xxxxxxx Multisizer IIe




         11.15.   SOP D-134 - Analysis of Percent OFP in Optison-Registered
                  Trademark- Headspace

         11.16.   SOP K-007 - Material Accountability Procedure

         11.17.   SOP K-077 - Visual Inspection of Final Containers

         11.18.   Current USP

12.  ATTACHMENTS

         12.1.    Attachment I (FORM 0367) - Optison-Registered Trademark- Final
                  Container Release Test Data




                            Attachment I (Form 0367)

      Optison-Registered Trademark- Final Container Release Test Data

Lot Number
          -------------------
ANALYTICAL ASSAY RESULTS



------------------------------------- --------------------------------------------- ------------------- --------------------
TEST                                  SPECIFICATIONS                                RESULT              PASS/FAIL
------------------------------------- --------------------------------------------- ------------------- --------------------
                                                                                               
USP STERILITY < 71 >                  Sterile
------------------------------------- --------------------------------------------- ------------------- --------------------
USP Bacterial Endotoxins Test < 86 >  Less than or equal to 0.5 Eu/mL
------------------------------------- --------------------------------------------- ------------------- --------------------
USP GENERAL SAFETY < 88 >             No death or other apparent signs of toxicity
------------------------------------- --------------------------------------------- ------------------- --------------------
pH (total of 10 vials)                pH 6.4 - 7.4
------------------------------------- --------------------------------------------- ------------------- --------------------
XXXXXXX ANALYSIS                      Concentration:
                                        5.8 - 5.0 x 10(2)mL
                                      --------------------------------------------------------------------------------------
                                      Mean Diameter:
                                        (3) 0 - 4.5um
                                      --------------------------------------------------------------------------------------
                                      Size Distribution:
                                        Not less than 80% are less
                                        than or equal to 7um
                                      --------------------------------------------------------------------------------------
                                      Not less than 93.7% are less than or equal
                                       to 10um
                                      --------------------------------------------------------------------------------------
                                      Not less than 96% are less than or equal to
                                       14um
                                      --------------------------------------------------------------------------------------
                                      Not less than 99% are less than or equal to
                                       21um
                                      --------------------------------------------------------------------------------------
                                      Average value of 0.0% with no vial greater
                                      than 0.1% for 31-33um
------------------------------------- --------------------------------------------- ------------------- --------------------
CONTENT UNIFORMITY                    Less than or equal to 1 Vial outside of
                                      Average plus or minus 15% with RSD less than
                                      or equal to 6%
                                      0 Vials outside of Average plus or minus 25%
                                      with RSD less than or equal to 7.8%
------------------------------------- --------------------------------------------- ------------------- --------------------
PHYSICAL APPEARANCE                   Undisturbed: Compact, well-defined
                                      Microsphere layer above a clear, infranatant
                                      colorless to yellow; free from extraneous
                                      particles. After inverting opaque & white
------------------------------------- --------------------------------------------- ------------------- --------------------
Microsphere Identity                  Spherical, non-aggregated microspheres
------------------------------------- --------------------------------------------- ------------------- --------------------
Fill volume 3.0 mL vials              3.0 mL Label Claim. (3.0 - 3.8 mL)
------------------------------------- --------------------------------------------- ------------------- --------------------
Headspace Analysis of                 Greater than or equal to 60% Headspace is OFP
Octafluoropropane (OFP)
------------------------------------- --------------------------------------------- ------------------- --------------------
Protein Concentration                 8-11mg/mL
------------------------------------- --------------------------------------------- ------------------- --------------------
OFP Identification                    Sample retention time must be plus or minus
                                      5% of average OFP reference retention time
------------------------------------- --------------------------------------------- ------------------- --------------------
Octafluoropropane Content in          Mean 0.22 plus or minus 0.11mg/mL
Suspension Layer                      (0.11-0.33), and all vials are within plus
                                      or minus 0.05mg/mL of the mean value.
------------------------------------- --------------------------------------------- ------------------- --------------------

RESULTS RECORDED BY:                                                   DATE
                    -----------------------------------------------        ----------------------------

QA REVIEW BY:                                                          DATE:
             ------------------------------------------------------         ---------------------------

                                End of Document



                                   Appendix 6

                                 CERTIFICATE OF
                                    ANALYSIS

Product:  Optison-Registered Trademark-                Part Number:_____________
Lot No.:  _____________________________                Exp. Date:_______________




     TEST                                  SPECIFICATION                                   RESULTS
     ----                                  -------------                                   -------
                                                                                     
STERILITY, USP                             Sterile                                         sterile

BACTERIAL ENDOTOXINS, USP                  less than or equal to 0.5 EU/mL                 passes

SAFETY, USP                                No signs of apparent toxicity                   non-toxic

APPEARANCE                                 Clear solution with white icrosphere layer on   passes
                                           top. Homogenous white suspension with mixing

PARTICULATE MATTER                         No extraneous particles present                 passes

CONTENT UNIFORMITY                         Conforms to requirements                        passes

pH                                         6.4 - 7.4                                       ____________

PROTEIN CONCENTRATION                      8 - 12 mg/mL                                    ____________ mg/mL

FILL VOLUME                                3.0 - 3.8 mL                                    ____________ xX

XXXXXXX COUNTER

  Concentration                            5.0 - 8.0 E8/mL                                 ____________ E8/mL

  Mean Diameter                            2.0 - 4.5 microns                               ____________ microns

  Size Distribution                        greater than or equal to 80%
                                            less than or equal to 7 microns                ____________ %
                                           greater than or equal to 93%
                                            less than or equal to 10 microns               ____________ %
                                           greater than or equal to 96%
                                            less than or equal to 14 microns               ____________ %
                                           greater than or equal to 99%
                                            less than or equal to 21 microns               ____________ %

                                           0.0% greater than or equal to 31 microns        passes
                                           less than or equal to 32 microns with no
                                           vial greater than 0.1%

OCTAFLUOROPROPANE IN HEADSPACE             greater than or equal to 60%                    ____________ %

IDENTIFICATION OF OCTAFLUOROPROPANE        Sample retention time matches reference         passes

OFP CONTENT IN SUSPENSION                  0.22 plus or minus 0.11 mg/mL                   ____________ mg/mL

                                           All vials are within plus or minus 0.05 mg/mL   passes
                                           of the mean value

MICROSPHERE IDENTITY                       Spherical, non-aggregated microspheres          passes



WE CERTIFY THAT THE ABOVE INFORMATION CONFORMS TO PRODUCT SPECIFICATIONS.


-----------------------------                         ----------------
Xxxxxx Xxxxx                                          Date
QA/QC Supervisor




                                   Appendix 7

                      Joint Steering Committee Procedures

1.   The Joint Steering Committee (the "Committee") shall be composed of four
     members, two to be appointed by MBI and two to be appointed by
     Mallinckrodt.

2.   To be binding on the parties, all decisions of the Committee must be voted
     on by all four members of the Committee.

3.   Any member of the Committee may cast his or her vote by proxy given to
     another member of the Committee.

4.   The time and place of meetings of the Committee shall be determined by
     mutual agreement of MBI and Mallinckrodt. In the event of a dispute, the
     decision as to time and place will alternate between the parties. Formal
     notice of the meeting shall be delivered to each member of the Committee at
     least 10 business days in advance of the meeting. Meeings of the Committee
     may be held by teleconference.

5.   Written minutes of each meeting of the Committee shall be kept by a member
     of the Committee to be elected by all members of the Committee. All
     decisions of the Committee shall be recorded in the minutes of each
     meeting. Minutes shall be approved by all members of the Committee.

6.   Each party shall bear the expenses of its representatives with respect to
     attendance at meetings of the Committee.

7.   Either MBI or Mallinckrodt can submit proposals to the Committee. Each
     proposal must be in detail and delivered at least five business days prior
     to the meeting at which the party submitting the proposal requests it to be
     considered.

8.   All protocols for a clinical trial for which the Committee has authority
     shall be submitted to all members at least 10 business days before the
     meeting of the Committee at which the clinical trial will be discussed.

9.   The Committee shall have the authority to appoint working groups comprised
     of employees of one or both of the parties to accomplish specific tasks in
     furtherance of fulfilling the Committee's objectives.

10.  The Committee shall develop master development plans for the ALBUNEX
     currently being marketed by Mallinckrodt and for the product which MBI has
     currently code-named FS069, and shall update and amend these plans as
     circumstances change.




                                SCHEDULE 6.02(h)

                            LIST OF PENDING LASWUITS

Civil Action No. 97-1732 (PLF)
Mallinckrodt Medical, Inc. and Molecular Biosystems, Inc. v. Nycomed Imaging AS.
United States District Court for the District of Columbia

Civil Action No. C97-1273 R
Sonus Pharmaceuticals, Inc. v. Molecular Biosystems, Inc. and Mallinckrodt
Medical, Inc.
United States District Court Western District of Washington at Seattle

Civil Action No. 99-273 (JJF)
DuPont Pharmaceuticals Co. and ImaRx Pharmaceuticals Corp. v. Molecular
Biosystems, Inc. and Mallinckrodt
United States District Court for the District of Delaware

Nycomed Imaging AS x. Xxxxxxxxxxxx Medical BV, Mallinckrodt Medical GMBH
Mallinckrodt Medizintechnik GMBH, Mallinckrodt Chemical GMBH, Mallinckrodt
Medical Holdings GMBH
Mallinckrodt Chemical Holdings GMBH and Molecular Biosystems, Inc.
District Court of the Hague, the Netherlands