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EXHIBIT 10.35
SECURITIES PURCHASE AGREEMENT
This Securities Purchase Agreement is entered into as of this 31st day
of January 1999 by and between Xxxxxx Laboratories, an Illinois corporation
("Abbott") and SONUS Pharmaceuticals, Inc. a Delaware corporation ("SONUS").
RECITALS
A. Concurrently herewith Abbott and SONUS are entering into a First
Amendment to that certain Agreement between Abbott and SONUS dated May 14, 1996
(as amended, the "U.S. Agreement") and a First Amendment to that certain
International License Agreement dated October 1, 1996 (as amended, the
"International Agreement") (the U.S. Agreement and the International Agreement
are collectively referred to herein as the "Agreements") whereby, among other
things, Abbott and SONUS have agreed that certain milestone payments shall be
made conditioned upon the achievement of specified milestones relating to a
Cardiology Indication (the "Cardiology Milestone Payments"), and that certain
milestone payments shall be conditioned upon the achievement of specified
milestones relating to a specified Radiology Indication (collectively, the
"Radiology Milestone Payments"), as more particularly specified on Appendix 2.3
of the U.S. Agreement and Appendix 5.2 and 5.3 of the International Agreement.
B. The Agreements provide that SONUS shall have the right to request
that Abbott prepay all or a portion of the Radiology Milestone Payments on or
after the Radiology Prepayment Date, as specified in Exhibit A attached hereto,
in consideration for the issuance by SONUS of shares of its Common Stock under
the terms and conditions provided herein.
C. Pursuant to Section 2.4 of the U. S. Agreement, and Article 2.2(A) of
the International Agreement, Abbott may at its option elect to fund certain
expenditures for clinical research conducted by SONUS to support research and
development for ultrasound diagnostic applications for certain specified
indications for the Product, in which event SONUS shall become obligated to
reimburse Abbott fifty percent (50%) of such costs and expenses funded by Abbott
plus accrued interest (the "Additional Clinical Reimbursement Amounts"). Such
sections of the Agreements further provide that in the event that the net
tangible assets of SONUS shall at any time fall below an amount equal to the
current Nasdaq National Market listing requirement for net tangible assets
contained in paragraph 4450(a)(3) of the NASD Manual, plus $1,000,000, SONUS at
its option may repay the Additional Clinical Reimbursement Amounts by delivering
shares of Common Stock of SONUS pursuant to the terms and provisions set forth
herein.
In consideration of the foregoing, and for other good and valuable
consideration, the receipt and adequacy of which is hereby acknowledged, the
parties hereby agree as follows:
[*] CONFIDENTIAL PORTIONS OMITTED AND
FILED SEPARATELY WITH COMMISSION
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1. Definitions. Capitalized terms used but not otherwise defined
herein shall have the meanings set forth in the Agreements, or a
specific Agreement as may be indicated herein or as may be
applicable due to variations in certain definitions between the
Agreements.
2. Purchase and Sale of Common Stock Upon Prepayment of Radiology
Milestone Payments and Payment of Repayment Amount.
2.1 Purchase and Sale Upon Prepayment of Radiology Milestone
Payments. In the event that SONUS desires that Abbott
prepay all or any portion of the Radiology Milestone Payment, SONUS shall give
written notice to Abbott of such prepayment request within one (1) year
following the Radiology Prepayment Date, which notice shall specify the amount
of the prepayment (which may not exceed the amount of the Radiology Milestone
Payment). In such event, pursuant to the terms and conditions set forth herein,
SONUS shall issue to Abbott and Abbott shall accept and purchase from SONUS a
number of shares of Common Stock equal to the amount of the prepayment divided
by the "Fair Market Value" per share of Common Stock. The "Fair Market Value" of
the Common Stock shall be determined as follows:
(a) If the Common Stock is listed on a national
securities exchange or admitted to unlisted trading privileges on such an
exchange, or is listed on the Nasdaq National Market or Small Cap Market or any
comparable system, the current Fair Market Value shall be the average of the
daily closing prices of the Common Stock on such exchange or Nasdaq for the
twenty (20) trading days prior to the notice by SONUS to Abbott of the requested
prepayment; the closing price for any day shall be the last reported sale price
regular way or, if no such reported sale takes place on such day, the average of
the closing bid and asked prices regular way for such day, in each case (1) on
the principal national securities exchange on which the shares of Common Stock
are listed or to which such shares are admitted to trading or (2) if the Common
Stock is not listed or admitted to trading on a national securities exchange, in
the over-the-counter market as reported by Nasdaq or any comparable system; or
(b) If the Common Stock is not so listed or
admitted to unlisted trading privileges or quoted on Nasdaq or any comparable
system, the current Fair Market Value shall be the average of the daily closing
prices for the twenty (20) trading days prior to the notice by SONUS to Abbott
of the requested repayment as furnished by two members of Nasdaq selected from
time to time in good faith by the Board of Directors of SONUS for that purpose;
or
(c) In the absence of the foregoing valuation
methods in Section 2.1(a) or (b), or if for any other reason the Fair Market
Value per share cannot be determined pursuant to Section 2.1(a) or (b), the
current Fair Market Value shall be determined in good faith as promptly as
reasonably practicable by the Board of Directors of SONUS.
(d) Anything herein to the contrary
notwithstanding, for the purpose of determining Fair Market Value under this
Section 2.1 (but not in Section 3.1), the Fair Market Value shall not exceed
$16.00 per share of Common Stock.
2.2 Purchase and Sale Upon Payment of Repayment Amount. In the
event SONUS has requested that Abbott prepay a Radiology Milestone Payment and
SONUS fails to
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achieve the milestone giving rise to the Radiology Milestone Payment within [*]
from the date of this Agreement, SONUS shall be obligated to pay Abbott an
amount equal to thirty percent (30%) of the amounts prepaid (the "Repayment
Amount") in cash, or by the issuance of shares of Common Stock. In the event
SONUS elects to pay the Repayment Amount in cash, such repayment shall be made
within ten (10) days following the expiration of the [*] period. In the event
SONUS elects to pay the Repayment Amount in the form of the issuance of shares
of Common Stock, SONUS shall issue to Abbott and Abbott shall accept and
purchase from SONUS that number of shares of Common Stock of SONUS equal to the
Repayment Amount divided by the Fair Market Value per share (determined in
accordance with Section 2.1 above for the seventeen (17) trading days preceding
the third trading day prior to the closing date). The issuance of such shares of
Common Stock shall constitute payment in full of the Repayment Amount. Anything
herein to the contrary notwithstanding, in the event that SONUS elected to pay
the Repayment Amount in the form of issuance of shares of SONUS Common Stock and
either (i) SONUS' ability to issue some or all of the shares of Common Stock for
such repayment to Abbott is suspended pursuant to the terms of Section 2.4, or
(ii) the conditions to closing set forth in Section 6 have not been fulfilled
within 180 days following the expiration of the [*] period following the date
hereof, then in either such event SONUS shall pay to Abbott the portion of the
Repayment Amount (not paid in the form of Common Stock) in the form of cash or
in another form mutually agreed to by the parties.
2.3 Closing. The closing for the purchase and sale of shares
of Common Stock shall occur at a mutually agreeable date and location, which
shall occur within the later of (i) (A) ten (10) days from the date of the
notice of exercise of prepayment by SONUS in the case of shares issued pursuant
to Section 2.1 above, or (B) within ten (10) days of expiration of the [*]
period following the date hereof in the case of shares issued pursuant to
Section 2.2 above, or (ii) five (5) days following the fulfillment of all of the
conditions set forth in Section 6 below. At the closing, SONUS shall deliver to
Abbott shares of Common Stock as provided in Section 2.1 or Section 2.2 above,
as applicable, against payment by Abbott to SONUS of the prepayment amount in
the case of Section 2.1 above. In addition, a duly authorized officer of each of
SONUS and Abbott shall deliver to the other a certificate confirming that their
respective representations and covenants set forth in Sections 4 and 5, as
applicable, are true and correct in all material respects as of the closing
date.
2.4 Suspension of Right to Request Prepayment. Anything herein
to the contrary notwithstanding, SONUS shall not have the right to request that
Abbott make any prepayment of any Radiology Milestone Payment or accept payment
of any Repayment Amount in return for the issuance of shares of Common Stock as
provided in this Section 2 if the number of shares of Common Stock to be issued
to Abbott would result in Abbott beneficially owning shares of Common Stock of
SONUS following the issuance in an amount equal to 19.9% or more of the
outstanding Common Stock of SONUS in which event SONUS shall be obligated to pay
the appropriate Repayment Amount in cash as set forth in Section 5(E) of the
U.S. Agreement or Section 5.5 of the International Agreement, as applicable. The
shares of Common Stock of SONUS subject to any warrants or other rights to
acquire shares of Common Stock shall be included for the purpose of determining
the number of shares beneficially owned by Abbott, but warrants and other rights
to acquire Common Stock held by persons other than Abbott shall not be included
for the purpose of determining the total amount of outstanding Common Stock.
Furthermore, anything herein to the contrary notwithstanding, SONUS shall not
have the right to
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request that Abbott make any prepayment of any Radiology Milestone Payment (a)
with respect to the U.S. Agreement (i) relating to the U.S. NDA approval
milestone unless and until SONUS has received the first U.S. FDA approval of the
Product in the Field (as defined in the U.S. Agreement), and (ii) relating to
the U.S. first shipment of Product milestone unless and until the U.S. first
shipment of Product has occurred and (b) with respect to the International
Agreement (i) relating to the U.S. NDA approval milestone, unless and until
SONUS has received the first U.S. FDA approval of the Product in the Field (as
defined in the U.S. Agreement) and (ii) relating to the first shipment date of
the Product in Germany, France, Italy, Spain, Canada or the United Kingdom
milestone, unless and until the first shipment of Product has occurred in any
such country. SONUS shall not repurchase its shares of Common Stock if such
repurchases (including shares repurchased by SONUS from Abbott) would cause
Abbott to beneficially own 19.9% or more of the outstanding Common Stock of
SONUS, calculated as set forth above.
3. Purchase and Sale of Common Stock Upon Exercise of Additional
Clinical Research Reimbursement Option.
3.1 Purchase and Sale. SONUS shall have the right at any time
after the amount of its net tangible assets is below an amount equal to the then
current Nasdaq National Market listing requirement for net tangible assets
contained in paragraph 4450(a)(3) of the NASD Manual, as such paragraph may be
amended from time to time, plus $1,000,000, to elect to fulfill its obligations
to repay Abbott for any or all of the outstanding Additional Clinical
Reimbursement Amounts payable to Abbott by the delivery to Abbott of shares of
Common Stock of SONUS. The amount of net tangible assets of SONUS shall be
determined as of the end of any month according to the unaudited balance sheet
of SONUS prepared in accordance with generally accepted accounting principles.
In the event SONUS desires to make such election, it shall notify Abbott in
writing of the election, specifying the amount of the Additional Clinical
Reimbursement Amount to be paid by delivery to Abbott of shares of Common Stock
and including a copy of the most recent monthly unaudited balance sheet.
3.2 Closing. The closing of the purchase and sale of shares of
Common Stock in connection with any such election shall be a mutually agreeable
date and location, which shall be within the later of (i) ten (10) days from the
notice from SONUS, or (ii) five (5) days following the fulfillment of all of the
conditions set forth in Section 6 below. At the closing, SONUS shall deliver to
Abbott a number of shares of Common Stock of SONUS equal to the amount of the
Additional Clinical Reimbursement Amount to be so paid, divided by the Fair
Market Value per share of Common Stock of SONUS determined in accordance with
the provisions of Section 2.1 above (excluding paragraph 2.1(d), against a
receipt by Abbott acknowledging receipt of the shares of Common Stock and a
cancellation of the Additional Clinical Reimbursement Amount to be so paid. In
addition, a duly authorized officer of each of SONUS and Abbott shall deliver to
the other a certificate confirming that the respective representations,
warranties and covenants set forth in Section 4 and 5 as applicable, are true
and correct in all material respects as of the closing date.
3.3 Suspension of Right to Issue Shares. Anything herein to
the contrary notwithstanding, SONUS shall not have the right to pay the
Additional Clinical Reimbursement Amounts in shares of Common Stock as provided
in this Section 3 if the number of shares of Common Stock to be issued to ABBOTT
would result in ABBOTT beneficially owning shares of Common Stock of SONUS
following the issuance in an amount equal to 19.9% or more of the
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outstanding Common Stock of SONUS, in which event SONUS shall be obligated to
pay the Additional Clinical Reimbursement Amounts in cash as set forth in
Section 2.4 of the U.S. Agreement or Section 2.2A of the International
Agreement, as applicable. The shares of Common Stock of SONUS subject to any
warrant or other right to acquire shares of Common Stock held by Abbott shall be
included for the purpose of determining the number of shares beneficially owned
by Abbott but warrants and other rights to acquire Common Stock held by persons
other than Abbott shall not be included for the purpose of determining the total
amount of outstanding Common Stock.
4. Representations, Warranties and Covenants of SONUS. SONUS hereby
represents and warrants to, and covenants with, Abbott as of the date hereof as
follows:
4.1 Authorization. SONUS has full power and authority to
execute, deliver and perform its obligations under this Agreement and to issue
and sell the Common Stock. All corporate action on the part of SONUS necessary
for the authorization, execution and delivery of this Agreement and the Common
Stock and the performance of all obligations of SONUS hereunder has been taken.
The execution and delivery of this Agreement and the Common Stock and the
performance of all obligations of SONUS hereunder have been duly authorized and
approved by the Board of Directors of SONUS and no further authorization is
necessary. This Agreement and the Common Stock are valid and legally binding
obligations of SONUS enforceable against it in accordance with their terms.
4.2 No Conflict. The execution, delivery and performance of
this Agreement and the issuance and sale of the Common Stock and the
consummation of each of the transactions contemplated hereby and thereby do not
and will not (a) conflict with or result in a breach of the terms, conditions or
provisions of, (b) with or without notice or lapse of time or both, constitute a
default under, (c) result in the creation of any lien, security interest, charge
or encumbrance upon the capital stock or assets of SONUS pursuant to, (d) with
or without notice or lapse of time or both, give any third party the right to
accelerate, cancel or terminate any obligation under, (e) result in a violation
of, or (f) require any order, qualification, waiver, permit, authorization,
consent, approval, exemption or other action by or from, or any registration,
notice, declaration, application or filing to or with, any court or
administrative or governmental body or any other person or entity pursuant to
(i) the Certificate of Incorporation or Bylaws of SONUS, (ii) any agreement to
which SONUS is a party or is bound or to which its assets are subject, which
conflict, breach or default would have a material adverse effect on SONUS or the
ability of SONUS to perform its duties or obligations hereunder or (iii) any
law, statute, rule or regulation to which SONUS is subject; provided, however,
that with respect to clause (f) of this Section 4.2, no representation or
warranty is made as to any such requirements applicable to SONUS as a result of
the specific legal or regulatory status of Abbott (including without limitation
any agreements between Abbott or its affiliates) or as a result of any other
facts that specifically relate to Abbott, any business in which Abbott has
engaged or proposes to engage or any financing arrangements or transactions
entered into or proposed to be entered into by or on behalf of Abbott and
provided, further, that no representation or warranty is made with respect to
the application of the Xxxx-Xxxxx-Xxxxxx Antitrust Improvement Act of 1976, as
amended (the "HSR Act"), to the issuance of the Common Stock. In the event that
the HSR Act should apply to the issuance of any shares of Common Stock, upon the
request of Abbott, SONUS agrees to prepare and file, and to assist Abbott and
cooperate with Abbott in its preparation and filing of all necessary
notifications and the
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providing of all necessary information pursuant to the HSR Act. The fees for any
such HSR filing shall be paid fifty percent (50%) by SONUS and fifty percent
(50%) by Abbott.
4.3 Valid Issuance of Common Stock. The Common Stock, when
issued, sold and delivered in accordance with the terms of this Agreement to
Abbott, will be duly authorized and validly issued and will be issued in
compliance in all material respects with all federal and state securities laws.
The shares of Common Stock have been duly and validly reserved for issuance and,
upon issuance in accordance with the terms hereof, will be duly authorized,
validly issued, fully paid and nonassessable and, assuming no distribution of
the Common Stock by Abbott, will be issued in compliance with all applicable
federal and state securities laws.
4.4 Valid Existence and Capitalization. SONUS is duly
incorporated, validly existing and in good standing under the laws of the State
of Delaware and is qualified to do business as a foreign corporation in the
State of Washington. As of the date hereof, the description of the
capitalization of SONUS and its outstanding equity securities and rights to
acquire equity securities and the holders thereof is as set forth on Exhibit B.
4.5 SEC Documents. As of their respective dates, all
registration statements and reports filed by SONUS with the Securities and
Exchange Commission under the Securities Act of 1933, as amended, and the
Securities Exchange Act of 1934, as amended, since January 1, 1998 complied in
all material respects with the requirements of such Acts and the rules and
regulations promulgated thereunder and did not contain any untrue statement of a
material fact or omit to state a material fact required to be stated therein or
necessary to make the statements therein not misleading.
5. Warranties and Covenants of Abbott. Abbott hereby represents and
warrants to, and covenants with, SONUS as of the date hereof as follows:
5.1 Authorization. Abbott has full power and authority to
execute, deliver and perform its obligations under this Agreement. All corporate
action on the part of Abbott necessary for the authorization, execution and
delivery of this Agreement and the performance of all obligations of Abbott
hereunder has been taken. The execution and delivery of this Agreement and the
performance of all obligations of Abbott hereunder were duly authorized and
approved by Abbott, and no further authorization is necessary. This Agreement is
a valid and legally binding obligation of Abbott, enforceable against it in
accordance with its terms.
5.2 No Conflict. The execution, delivery and performance of
this Agreement and the consummation of each of the transactions contemplated
hereby do not and will not (a) conflict with or result in a breach of the terms,
conditions or provisions of, (b) with or without notice or lapse of time or
both, constitute a default under, (c) result in the creation of any lien,
security interest, charge or encumbrance upon Xxxxxx'x capital stock or assets
pursuant to, (d) with or without notice or lapse of time or both, give any third
party the right to accelerate, cancel or terminate any obligation under, (e)
result in a violation of, or (f) require any order, qualification, waiver,
permit, authorization, consent, approval, exemption or other action by or from,
or any registration, notice, declaration, application or filing to or with, any
court or administrative or governmental body or any other person or entity
pursuant to (i) the Certificate of Incorporation or Bylaws of Abbott, (ii) any
material agreement to which Abbott is a party or is bound or to which its
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assets are subject or (iii) any law, statute, rule or regulation to which Abbott
is subject; provided, however, that with respect to clause (f) of this Section
5.2, no representation or warranty is made as to any such requirements
applicable to Abbott as a result of the specific legal or regulatory status of
SONUS (including without limitation any agreements between SONUS or its
affiliates) or as a result of any other facts that specifically relate to SONUS,
any business in which SONUS has engaged or proposes to engage or any financing
arrangements or transactions entered into or proposed to be entered into by or
on behalf of SONUS and provided, further, that no representation or warranty is
made with respect to the application of the HSR Act to the issuance of the
Common Stock. Upon the request of SONUS, Abbott agrees to prepare and file, and
to assist SONUS and cooperate with SONUS in its preparation and filing of all
necessary notifications and the providing of all necessary information pursuant
to the HSR Act. The fees for any such HSR filing shall be paid fifty percent
(50%) by Abbott and fifty percent (50%) by SONUS.
5.3 Accredited Investor Status. Abbott is an "accredited
investor" within the meaning of Regulation D promulgated under the Securities
Act of 1933, as amended (the "Securities Act").
5.4 Restricted Securities. Abbott understands that the shares
of Common Stock to be issued hereunder are restricted securities and may not be
sold, transferred or otherwise disposed of without registration under the
Securities Act or the availability of an exemption therefrom, and that in the
absence of an effective registration statement covering such securities or an
exemption from registration, the Common Stock must be held indefinitely. In the
absence of an effective registration statement under the Securities Act with
respect to the Common Stock, Abbott shall notify the Company of any proposed
disposition by Abbott of the Common Stock, shall furnish SONUS with a statement
of the circumstances surrounding the proposed disposition and, if reasonably
requested by SONUS, shall furnish SONUS with an opinion of counsel, reasonably
satisfactory to SONUS, that such disposition will not require the registration
of such Common Stock under the Securities Act; provided, however, that a notice
and an opinion of counsel will not be required for routine sales under Rule 144
under the Securities Act.
6. Conditions. The closing of the purchase by Abbott of Common Stock
of SONUS under Sections 2.3 and 3.2 shall be conditioned upon receipt of the
officer's certificates referenced in Sections 2.3 and 3.2, and upon the
following conditions any or all of which may be waived by Abbott in its sole
discretion:
6.1 Agreements in Effect. The amendments to the Agreements
referred to in Recital A above shall have been executed and delivered by the
parties thereto, and the Agreements shall be in full force and effect and SONUS
shall not be in breach, after all applicable cure periods, in any material
respect of its obligations thereunder.
6.2 No Material Adverse Change. Since the end of the last
fiscal quarter of SONUS, there shall have been no material adverse change in the
business, management, results of operations or financial condition of SONUS
which has not been publicly disclosed by SONUS.
6.3 Xxxx-Xxxxx-Xxxxxx. If the HSR Act shall apply, all waiting
periods under the HSR Act shall have expired or been earlier terminated without
action by the Justice Department or the Federal Trade Commission to prevent or
materially alter the consummation of the
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transactions contemplated by this Agreement.
6.4 Actions or Proceedings. No action or proceeding by any
court or other governmental authority or other person or entity shall have been
instituted or threatened which could enjoin or prohibit any provision of this
Agreement or the consummation of the transactions contemplated hereby.
7. Miscellaneous.
7.1 Governing Law. This Agreement shall be governed by, and
construed in accordance with the laws of the State of Delaware, without regard
to the conflicts of law rules of such state.
7.2 Successors and Assigns. Neither this Agreement nor any of
the rights, interests or obligations hereunder shall be assigned by SONUS or
Abbott without the prior written consent of Abbott or SONUS, respectively;
provided, however, that either party may assign this Agreement to any of its
Affiliates, or to any successor by merger or sale of substantially all of its
business unit to which this Agreement relates without the consent of the other
party. Any assignment or delegation in contravention of this Agreement shall be
void and shall not relieve the assigning or delegating party of any obligation
hereunder. Except as set forth in the preceding sentences, this Agreement shall
inure to the benefit of and be binding upon the parties hereto and their
respective successors and permitted assigns.
7.3 No Third Party Beneficiaries. Nothing in this Agreement,
whether express or implied, shall be construed to give any person, other than
the parties hereto, any legal or equitable right, remedy or claim under or in
respect of this Agreement.
7.4 Counterparts. This Agreement may be executed in any number
of counterparts with the same effect as if all parties hereto had signed the
same document. Each counterpart shall be enforceable against the parties
actually executing such counterpart, and all counterparts shall be construed
together and shall constitute one instrument.
7.5 Severability. If one or more provisions of this Agreement
are held to be unenforceable under applicable law, such provision shall be
excluded from this Agreement and the balance of the Agreement shall be
interpreted as if such provision were so excluded and shall be enforceable in
accordance with its terms.
7.6 Notices. Unless otherwise provided, any notice required or
permitted under this Agreement shall be given as follows:
To Abbott:
(1) Xxxxxx Laboratories
000 Xxxxxx Xxxx Xxxx
Xxxxxx Xxxx, Xxxxxxxx 00000-0000
Attn: President - Hospital Products Division
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With a copy to:
Xxxxxx Laboratories
000 Xxxxxx Xxxx Xxxx
Xxxxxx Xxxx, Xxxxxxxx 00000-0000
Attn: Divisional Vice President
Domestic Legal Affairs
D-322/AP6D
and (2)Xxxxxx International, Ltd.
000 Xxxxxx Xxxx Xxxx
Xxxxxx Xxxx, Xxxxxxxx 00000-0000
Attn: President - Abbott International
With a copy to:
Xxxxxx International, Ltd.
000 Xxxxxx Xxxx Xxxx
Xxxxxx Xxxx, Xxxxxxxx 00000-0000
Attn: Divisional Vice President
International Legal Operations
D-323/AP6D
To SONUS:
SONUS Pharmaceuticals, Inc.
00000 00xx Xxxxxx, X.X., Xxxxx 000
Xxxxxxx, Xxxxxxxxxx 00000
Attn: Chief Executive Officer
7.7 Public Announcements. Any press release or other public
statement issued by any party relating to this Agreement or the transactions
contemplated hereby shall be governed by Section 22 of the U.S. Agreement.
7.8 Entire Agreement. This Agreement constitutes the entire
agreement between the parties concerning the subject matter hereof. This
Agreement may be amended, modified or waived only by a written instrument
executed by duly authorized representatives or both parties.
7.9 Alternative Dispute Resolution. The Parties agree that any
dispute that arises in connection with this Agreement shall be determined
according to the Alternative Dispute Resolution provisions set forth in Section
21 of the U.S. Agreement.
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IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first above written.
SONUS PHARMACEUTICALS, INC.
By: /s/ Xxxxxxx X. Xxxxxxx
---------------------------------------------
Name: Xxxxxxx X. Xxxxxxx
Title: President
XXXXXX LABORATORIES
By: /s/ Xxxxxxx X. Xxxxxxxx
---------------------------------------------
Name: Xxxxxxx X. Xxxxxxxx
Title: President - Hospital Products Division
Attachments:
Exhibit A - Radiology Milestone Dates
Exhibit B - Capitalization of SONUS
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EXHIBIT A
U.S. AGREEMENT
RADIOLOGY RADIOLOGY
MILESTONE PREPAYMENT DATE MILESTONE PAYMENT
--------- --------------- -----------------
U.S. NDA [*] $2.0 Million
Approval
U.S. First [*] $2.0 Million
Shipment of Product
Total:$4.0 Million
INTERNATIONAL AGREEMENT
RADIOLOGY RADIOLOGY
MILESTONE PREPAYMENT DATE MILESTONE PAYMENT
--------- --------------- -----------------
U.S. NDA
Approval Within 15 Days [*] $1,500,000
European Community
Authorization Granted
Within 105 days: [*] $850,000
Within 195 days: [*] $850,000
Within 265 days: [*] $350,000
First Shipment Date of
Product for Sale
(to Germany, France,
Italy, Spain, Canada, or
the United Kingdom)
Within 15 days: [*] $1,500,000
Within 105 days: [*] $500,000
Total: $5,550,000
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* Anything herein to the contrary notwithstanding, the Radiology Prepayment Date
shall be the later of (i) the date referenced, or (ii) the first U.S. FDA
approval for the Product in the Field (as defined in the U.S. Agreement).
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** Anything herein to the contrary notwithstanding, the Radiology Prepayment
Date shall be the later of (i) the date referenced, or (ii) the U.S. first
shipment of Product.
*** Anything herein to the contrary notwithstanding, the Radiology Prepayment
Date shall be the later of (i) the date referenced, or (ii) the first shipment
date of Product in Germany, France, Italy, Spain, Canada or United Kingdom.
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EXHIBIT B
CAPITALIZATION OF SONUS
Common Stock:
Authorized: 20,000,000 shares of Common Stock; 5,000,000
shares of Preferred Stock Outstanding as of
December 31, 1998: 8,632,225 shares of Common Stock
No shares of Preferred Stock
Options:
Authorized: 2,022,137
Outstanding as of
December 31, 1998: 1,311,091
Warrants:
Outstanding as of
December 31, 1998: 785,161
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Note: SONUS also has in place a Stockholders Rights Plan which provides for the
issuance of Convertible Preferred Stock under certain circumstances.
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