APPENDIX A
 
              ALLIANCE PHARMACEUTICAL CORP. AUDIT COMMITTEE CHARTER
 
ORGANIZATION
 
This charter governs the operations of the audit committee of Alliance
Pharmaceutical Corp. (the "Company"). The committee shall review and reassess
the charter at least annually and obtain the approval of the board of directors.
The committee shall be appointed by the board of directors and shall comprise at
least three directors, each of whom is independent of management and the
Company. Members of the committee shall be considered independent if they have
no relationship that may interfere with the exercise of their independence from
management and the Company. All committee members shall be financially literate,
or shall become financially literate within a reasonable period of time after
appointment to the committee and at least one member shall have accounting or
related financial management expertise.
 
STATEMENT OF POLICY
 
The audit committee shall provide assistance to the board of directors in
fulfilling their oversight responsibility to the shareholders, potential
shareholders, the investment community, and others relating to the Company's
financial statements and the financial reporting process, the systems of
accounting and financial controls, and the annual independent audit of the
Company's financial statements. In so doing, it is the responsibility of the
committee to maintain free and open communication between the committee,
independent auditors and management of the Company. In discharging its oversight
role, the committee is empowered to investigate any matter brought to its
attention with full access to all books, records, facilities, and personnel of
the Company and the power to retain outside counsel, or other experts, for this
purpose.
 
RESPONSIBILITIES AND PROCESSES
 
The primary responsibility of the audit committee is to oversee the Company's
financial reporting process on behalf of the board and report the results of
their activities to the board. Management is responsible for preparing the
Company's financial statements, and the independent auditors are responsible for
auditing those financial statements. The committee in carrying out its
responsibilities believes its policies and procedures should remain flexible, in
order to best react to changing conditions and circumstances. The committee
should take the appropriate actions to set the overall corporate "tone" for
quality financial reporting, sound business risk practices, and ethical
behavior.
 
The following shall be the principal recurring process of the audit committee in
carrying out its oversight responsibilities. The processes are set forth as a
guide with the understanding that the committee may supplement them as
appropriate.
 
         o        The committee shall have a clear understanding with management
                  and the independent auditors that the independent auditors are
                  ultimately accountable to the board and the audit committee,
                  as representatives of the Company's shareholders. The
                  committee shall have the ultimate authority and responsibility
                  to evaluate and, where appropriate, replace the independent
                  auditors. The committee shall discuss with the auditors their
                  independence from management and the Company and the matters
                  included in the written disclosures required by the
                  Independence Standards Board. Annually, the committee shall
                  review and recommend to the board the selection of the
                  Company's independent auditors, subject to shareholders'
                  approval.
 
         o        The committee shall discuss with the independent auditors the
                  overall scope and plans for their respective audits including
                  the adequacy of staffing and compensation. Also, the committee
                  shall discuss with management and the independent auditors the
                  adequacy and effectiveness of the accounting and financial
                  controls, including the Company's system to monitor and manage
                  business risk, and legal and ethical concerns. Further, the
                  committee shall meet separately with the independent auditors,
                  with and without management present, to discuss the results of
                  their examinations.
 
         o        The committee shall discuss the results of the quarterly
                  review and any other matters required to be communicated to
                  the committee by the independent auditors under generally
                  accepted auditing standards. The chair of the committee may
                  represent the entire committee for the purposes of this
                  review.
 
 
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         o        The committee shall review with the management and the
                  independent auditors the financial statements to be included
                  in the Company's Annual Report on Form 10-KSB (or the annual
                  report to shareholders if distributed prior the filing of Form
                  10-KSB), including their judgment about the quality, not just
                  acceptability, of accounting principles, the reasonableness of
                  significant judgments, and the clarity of the disclosures in
                  the financial statements. Also, the committee shall discuss
                  the results of the annual audit and any other matters required
                  to be communicated to the committee by the independent
                  auditors under generally accepted auditing standards.