EXHIBIT 10.33
FIRST AMENDMENT TO AGREEMENT
BY AND BETWEEN
ABBOTT LABORATORIES AND SONUS PHARMACEUTICALS, INC.
THIS FIRST AMENDMENT TO AGREEMENT ("Amendment") is dated January 31,
1999 ("Amendment Effective Date"), by and between Abbott Laboratories, an
Illinois corporation with principal offices at 100 Abbott Park Road, Abbott
Park, Illinois 60064-3500 ("ABBOTT") and SONUS Pharmaceuticals, Inc., a Delaware
corporation with principal offices at 22026 20th Avenue, S.E., Suite 102,
Bothell, Washington 98021 ("SONUS").
RECITALS
WHEREAS, ABBOTT and SONUS have previously entered into the Agreement
dated May 14, 1996 ("Agreement") whereby SONUS granted to ABBOTT and ABBOTT
obtained from SONUS certain exclusive marketing rights to certain ultrasound
contrast agents, including EchoGen(R), in the United States in accordance with
the terms and conditions thereof;
WHEREAS, Abbott International, Ltd. ("Abbott International") and SONUS
entered into an International License Agreement, dated October 1, 1996 whereby
SONUS granted to Abbott International and Abbott International obtained from
SONUS certain exclusive marketing rights to EchoGen(R) in certain areas outside
the United States in accordance with the terms and conditions thereof
("International Agreement"), which agreement shall be amended as of the
Amendment Effective Date as specifically set forth in the amendment to such
agreement;
WHEREAS, ABBOTT and SONUS entered into a Development and Supply
Agreement, dated May 6, 1993, whereby ABBOTT assisted in the manufacturing
scale-up for EchoGen(R) and agreed to manufacture EchoGen(R) for SONUS ("Supply
Agreement"); and
WHEREAS, ABBOTT and SONUS desire to amend the Agreement, as set forth in
this Amendment, simultaneously with amending the International Agreement and
executing a letter of understanding with respect to the amendment of the Supply
Agreement as soon a reasonably practicable;
NOW, THEREFORE, in consideration of the premises and the mutual promises
and covenants set forth below, ABBOTT and SONUS mutually agree as follows:
1. ARTICLE 1 - DEFINITIONS. Capitalized terms used in this Amendment and
not otherwise
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defined in this Amendment shall have the meanings set forth in the Agreement.
Article 1 shall be amended by adding the following definitions:
1.21 "Cardiology Indication" means an indication for EchoGen(R) Emulsion
which is substantially equivalent to the following: EchoGen(R) Emulsion as
indicated for use in resting echocardiography to provide contrast enhancement of
ventricular chambers and to improve endocardial border delineation in patients
with suboptimal echoes undergoing ventricular function and wall motion studies.
1.22 "Radiology Indication" means an indication for EchoGen(R) Emulsion
which is substantially equivalent to the following: EchoGen(R) Emulsion as
indicated for use in adult patients undergoing ultrasound examination to provide
contrast enhancement or facilitate visualization of anatomic structures,
lesions, and normal and abnormal blood flow patterns during studies of the
liver, kidney, and peripheral vasculature.
1.23 "Supply Agreement" shall mean the EchoGen(R) Contrast Agent
Development and Supply Agreement between ABBOTT and SONUS as amended and
restated as of the Amendment Effective Date as such agreement may be further
amended from time to time.
1.24 "Cardiology/Radiology Approval Date" means the later to occur of
(i) the date of FDA approval for the Cardiology Indication, and (ii) the date of
FDA approval for the Radiology Indication.
2. APPENDIX 2.3 - RESEARCH AND DEVELOPMENT PAYMENT SCHEDULE shall be
deleted and replaced with the amended Appendix 2.3, attached to this Amendment.
SONUS acknowledges and agrees that the amounts referred to in items 1, 2, 3, 4,
and 5 of the Appendix 2.3, as amended by this Amendment, have been paid by
ABBOTT to SONUS in full prior to the Amendment Effective Date.
3. SECTION 2.4 - ADDITIONAL CLINICAL RESEARCH shall be deleted in its
entirety and replaced with the following:
"2.4 Additional Clinical Research.
(A) ABBOTT shall have no obligation to provide financial support
for research
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and development, including clinical research, to be conducted by SONUS
except for the amounts payable by ABBOTT as set forth in Section 2.3 and
Article 7. SONUS shall promptly notify ABBOTT in writing if SONUS
desires that ABBOTT fund expenditures for clinical research in addition
to that set forth in the Plan to support research and development for
ultrasound diagnostic applications for indications other than the
Cardiology Indication and the Radiology Indication. Such notice from
SONUS shall include a budget for clinical research and a preliminary
clinical plan. ABBOTT shall communicate its decision whether or not to
financially participate in such clinical research within ninety (90)
days of receipt of the budget and clinical plan from SONUS. ABBOTT shall
be under no obligation to financially support such additional clinical
research. If ABBOTT desires to participate financially in such
additional clinical research, and communicates its decision to
participate in writing, ABBOTT shall reimburse SONUS for SONUS'
documented incremental costs and expenses incurred with respect to the
additional clinical research described in Sections 2.2 and 2.6 and which
are mutually agreed upon by the parties in writing. SONUS will document
the costs incurred during the studies approved by ABBOTT and submit
detailed cost summaries to ABBOTT on a monthly basis. ABBOTT will
reimburse SONUS for such documented costs incurred within thirty (30)
days of receipt of the cost summaries, subject to the funding
limitations set forth herein. If SONUS determines that there will be any
material variance in the actual costs, as compared to the approved
funding, SONUS will promptly notify ABBOTT and obtain prior written
approval from ABBOTT in advance of incurring the additional costs. Any
funding by ABBOTT in addition to that indicated above may be approved by
ABBOTT at its sole discretion. Furthermore, ABBOTT may terminate its
participation in and reimbursement of the costs of the clinical research
if ABBOTT has any concern over safety and/or efficacy issues at any
time. For any such cost and expenses ABBOTT funds, SONUS shall reimburse
ABBOTT for fifty percent (50%) of such costs and expenses funded by
ABBOTT, plus interest at the prime rate of interest (as published in the
Wall Street Journal, Midwest Edition on the date on which ABBOTT
provides such funding) ("Reimbursement Amount"). Reimbursement Amounts
shall be aggregated on an annual basis and must be repaid by SONUS
within five (5) years from the end of the calendar year in which the
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Reimbursement Amount was advanced by ABBOTT as provided in Subsections
(i), (ii), (iii) and (iv) below. Interest on outstanding Reimbursement
Amounts shall be accrued monthly. Reimbursement Amounts shall be paid by
SONUS to ABBOTT, by either, at the option of SONUS:
(i) reimbursing ABBOTT in cash for the Reimbursement Amount
within five (5) years from the end of the calendar year in which
such Reimbursement Amount is paid by ABBOTT; or
(ii) reducing the percentage amounts payable by ABBOTT to SONUS
as provided in Article 7 at such dates and in such amounts as
mutually agreed by the parties; or
(iii) in the event that the net tangible assets of SONUS shall
fall 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 provision may be
amended from time to time), plus One Million Dollars
($1,000,000), reimbursing ABBOTT such Reimbursement Amount with
interest at the United States prime rate of interest (as
published in the Wall Street Journal Midwest Edition on the date
on which ABBOTT funds such reimbursement), by issuing and
delivering to ABBOTT shares of Common Stock of SONUS having a
fair market value equal to the Reimbursement Amount pursuant to
the terms, provisions and conditions of a Securities Purchase
Agreement in form attached hereto as Appendix 2.4, and which is
incorporated herein by this reference; or
(iv) reimbursing ABBOTT partially in cash pursuant to Section
2.4(A)(i) and the remainder in SONUS Common Stock pursuant to
Section 2.4(A)(iii).
SONUS shall provide fifteen (15) days prior written notice to ABBOTT of
the payment option SONUS elects under this Section 2.4(A). In addition,
the definition of the "Field" set forth in Section 1.6 shall be expanded
to include the indication(s) funded by ABBOTT pursuant to this Section
2.4(A).
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(B) If the parties are unable to agree on a reduction of the
percentage allocations of Revenue Payments payable by ABBOTT to SONUS in
Article 7 pursuant to Section 2.4(A)(ii) within thirty (30) days of the
date on which they began discussing such reduction, then the parties
shall utilize the ADR Procedure under Article 21 to determine the
reduction in percentage amounts payable by ABBOTT to SONUS in Article 7.
In such event, from the time the ADR process is initiated and until the
final decision of the neutral, Abbott, at its option, may withhold from
payment to SONUS ten percent (10%) of the Revenue Payments due to SONUS
under Article 7. The neutral shall also determine whether ABBOTT owes to
SONUS a portion of the Revenue Payment withheld during the ADR, or SONUS
owes to ABBOTT certain sums. Such amount due by one party to the other
(if any) shall be due and payable (with interest at the prime rate of
interest, as published in the Wall Street Journal, Midwest Edition on
the date on which the decision is delivered) within thirty (30) days of
the delivery of a decision.
(C) In the event ABBOTT should terminate its reimbursement of
costs and expenses incurred by SONUS in connection with any clinical
research pursuant to Section 2.4(A) prior to the conclusion of such
clinical research, the parties shall negotiate in good faith to modify
the percentage allocations of Revenue Payments allocable to such
additional indications under Section 7.1 to reflect the amount of the
additional expenditures made by SONUS for such additional clinical
research, together with such other factors as are appropriate.
Notwithstanding the foregoing, if within ninety (90) days of the receipt
of regulatory approval of the Product for such additional indication
supported by such clinical research in the United States or the European
Union (whichever first occurs) ABBOTT pays to SONUS the amount ABBOTT
would have paid had ABBOTT not terminated such reimbursement with
interest at the prime rate of interest (as published in the Wall Street
Journal, Midwest Edition on the date on which the termination took place
from the date of such unreimbursed expenditures by SONUS to the date of
payment by ABBOTT), the obligation of SONUS to reimburse ABBOTT as set
forth above shall continue with respect to all such amounts paid by
ABBOTT.
(D) If ABBOTT determines not to provide additional financial
support for such additional clinical research as provided in Section
2.4(A) and SONUS proceeds with the additional research and development,
then the parties shall
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negotiate in good faith to modify the percentage allocations of Revenue
Payments allocable to such additional indications under Section 7.1
below to reflect the amount of the expenditures to be made by SONUS for
such additional clinical research related to such additional
indications, together with such other factors as are appropriate. If the
parties are unable to agree upon a reasonable modification of the
percentage allocation of Revenue Payments within thirty (30) days of the
date on which they began discussing such modification, then the parties
shall use the ADR procedure pursuant to Article 21 to determine the
modification of the percentage allocations of Revenue Payments (if any).
The provisions of this Section 2.4 shall apply only with respect to the
new indications for the Product specified above and shall not apply to
any new product which is subject to the right of first refusal pursuant
to Article 10."
4. SECTION 3.2 shall be amended as follows:
A. APPENDIX 3.2B - FORECASTED NET SALES ("NET SALES FORECAST"). The
Net Sales Forecast shall be updated and revised by ABBOTT and
mutually agreed upon by the parties in good faith.
B. SECTION 3.2(A) second sentence shall be amended as follows:
"ABBOTT shall use its reasonable best efforts to optimize sales,
profitability and market share of the Product in the Territory in
a manner consistent with the efforts which it exerts to optimize
sales, profitability, and market share of its other products in
the Territory."
C. SECTION 3.2(B) shall be amended by restating the preamble
paragraph and clause (i) as follows:
"(B) SONUS shall not have the right to co-promote (as
defined herein) the Product unless and until such time as SONUS
has received FDA approval of the Product for both the Cardiology
Indication and the Radiology Indication. In the event that (and
after such time as) SONUS has received FDA approval for the
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Product for both the Cardiology Indication and the Radiology
Indication, SONUS may co-Promote the Product at its own expense
in the Territory only under the following circumstances:
(i) at any time after the first anniversary of the
First Shipment Date, if ABBOTT's Net Sales to Third Parties are
below fifty percent (50%) of the mutually agreed upon Net Sales
Forecast for any two consecutive calendar quarters. SONUS shall
notify ABBOTT in writing within thirty (30) days of receipt of
the applicable second quarterly Net Sales report, as set forth in
Section 7.1, of its intention to co-promote the Product. The Net
Sales Forecast shall include the material assumptions made in
preparing the Net Sales Forecast, including without limitation,
the anticipated Cardiology Indication Approval Date and Radiology
Indication Approval Date. SONUS' right to co-promote would be
effective thirty (30) days after the date of ABBOTT's receipt of
notice from SONUS. If SONUS does not so inform ABBOTT, then SONUS
shall have waived its right to co-promote the Product with regard
to that specific failure of ABBOTT to meet its Net Sales Forecast
for such two (2) consecutive calendar quarters. In the event that
the Cardiology/Radiology Approval Date does not occur within the
time frame contemplated by the parties as set forth in Net Sales
Forecast, the Net Sales Forecast shall be adjusted as mutually
agreed by the parties to reflect the revised anticipated
Cardiology/Radiology Approval Date and the specific indications
approved, and any material changes to the assumptions for the Net
Sales Forecast, including without limitation, any additional
indications which may be approved as contemplated in Section 2.4.
If the parties are unable to agree on such adjustment within
thirty (30) days of the date on which they began discussing such
adjustment, then the parties shall utilize the Alternative
Dispute Resolution Procedure set forth in Section 21 to determine
such adjustment."
D. SECTION 3.2(C) shall be amended by adding to the beginning
thereto the following:
"In the event that SONUS co-promotes the Product pursuant
to Section 3.2(B), such co-promotion shall be in a manner
designed to be
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complementary to ABBOTT's sales and marketing efforts. All SONUS
deployment and promotional plans and budgets must be reviewed and
approved by ABBOTT prior to implementation, such approval not to
be unreasonably withheld."
5. SECTION 3.4(A) - PRODUCT MANUFACTURE shall be deleted in its entirety
and replaced with the following:
"(A) ABBOTT and SONUS have previously entered into a
Development and Supply Agreement dated as of May 6, 1993, as
amended ("Supply Agreement") under which ABBOTT has agreed to
manufacture the Product for SONUS. SONUS may purchase Product
under the Supply Agreement to fulfill ABBOTT's purchase orders
under Section 3.5. All manufacturing of the Product by ABBOTT for
sale in the Territory by ABBOTT shall be governed by the terms of
the Supply Agreement, as amended from time to time, and the
specifications for the Product in effect under the Supply
Agreement."
6. SECTION 3.5 - PRODUCT FORECASTS, ORDERS AND REJECTED PRODUCT shall be
amended by adding at the end thereto Subsection (H) as follows:
"(H) ABBOTT and SONUS agree that during the term of the
Agreement a certain portion of the Product will be packaged in a
kit (procedure tray). In the early years following the First
Shipment Date of the Product in a stand-alone vial, a larger
percentage of total Unit Sales shall consist of kits, whereas, in
later years, ABBOTT shall move toward marketing and selling a
certain portion of the Product in a stand alone vial, as opposed
to packaged in a kit in accordance with the following guidelines:
Kits as a Maximum
Following First Shipment Date Percentage of Total Unit Sales
----------------------------- ------------------------------
First 12 Months 100%
Second 12 Months 90%
Third 12 Months 75%
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Fourth 12 Months 50%
Fifth 12 Months and remainder of 25%
Term of Agreement
After the expiration of the Launch Budget Reimbursement Payments
under Article 6.2 and in the event that actual Unit Sales of the
kits (procedure trays) as a percentage of total Unit Sales exceed
the percentage thresholds set forth in this subsection (H),
ABBOTT and SONUS agree to meet to discuss an adjustment of the
percentages or modifications to the kit (procedure tray) or
modification to the percentage allocation of Revenue Payments
under Article 7.1, as appropriate. If the parties are unable to
agree upon an appropriate and reasonable adjustment or
modification within thirty (30) days of the date on which they
began discussing such modification, then the parties shall use
the ADR procedure pursuant to Article 21 to determine an
appropriate and reasonable adjustment or modification, if any.
7. SECTION 3.6 - CLINICAL RESEARCH, REGULATORY AFFAIRS, TECHNICAL
MARKETING/MEDICAL SUPPORT. The last two sentences of subsection (A) are deleted.
Subsections (C) and (D) are added as follows:
"3.6. Clinical Research, Regulatory Affairs, Technical
Marketing/Medical Support.
(C) ABBOTT shall be responsible for required adverse drug
event reporting to the FDA and will consult with SONUS prior to
such required reports to allow SONUS to conduct an investigation
of the event and review all such reports prior to submission to
the FDA. Notwithstanding the foregoing provisions, however,
nothing in this Agreement shall require ABBOTT to delay
submitting any adverse event report beyond the time limit set by
the FDA. Each party shall promptly notify the other party of all
communications from and to the FDA regarding the Product.
(D) ABBOTT shall be responsible for obtaining
reimbursement code programs with respect to all federally-funded
and/or state-funded reimbursement
9
programs. ABBOTT will pursue such activities diligently and will
use its reasonable best efforts to obtain such reimbursement code
programs."
8. ARTICLE 4 - CANADA AND LATIN AMERICA AND OTHER TERRITORIES shall be
deleted in its entirety.
9. SECTION 5 - LICENSES shall be amended by adding a new Subsection (D) as
follows:
"(D) As specified in amended Appendix 2.3 certain
milestone payments have been conditioned upon the achievement of
specific milestones relating to the Cardiology Indication and the
Radiology Indication. Payments due on or after the date of this
Amendment have been apportioned (i) fifty percent (50%) to
milestones related to the achievement of the FDA approval of the
Cardiology Indication for the Product ("Cardiology Milestone
Payments") and (ii) fifty percent (50%) have been apportioned to
the achievement of FDA approval of the Radiology Indication (or a
modification of the Radiology Indication, as may be mutually
agreed upon by ABBOTT and SONUS through good faith discussions
and in writing, through a development plan agreed upon and
approved by both ABBOTT and SONUS within ninety (90) days
following the date hereof) for the Product and other specific
milestones relating to the Radiology Indication ("Radiology
Milestone Payments").
(E) Within one (1) year following the Radiology Prepayment
Date (as such term is defined on Exhibit A to the Securities
Purchase Agreement), SONUS shall have the right to request that
ABBOTT prepay any or all of the Radiology Milestone Payments in
consideration for the issuance by SONUS to ABBOTT of shares of
SONUS Common Stock, pursuant to and subject to the terms and
conditions of a the Securities Purchase Agreement in the form
attached hereto as Appendix 2.4, the terms and conditions of
which Securities Purchase Agreement are incorporated herein by
reference. Anything herein or in the Securities Purchase
Agreement notwithstanding, SONUS shall not have the right to
request that Abbott make any prepayment of any Radiology
Milestone Payment (i) relating to the NDA approval milestone
unless and until SONUS has received the
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first FDA approval of the Product in the Field, and (ii) relating
to the first shipment of the Product milestone unless and until
the first shipment of the Product has occurred. If SONUS does not
request prepayment of the Radiology Milestone Payments within
such one (1) year period as provided in the Securities Purchase
Agreement, ABBOTT shall not be obligated to pay the Radiology
Milestone Payments until such time as SONUS obtains FDA approval
of the Radiology Indication. In the event that ABBOTT has prepaid
any or all of the Radiology Milestone Payments, SONUS shall repay
thirty percent (30%) of the dollar value of such prepaid amount
("Repayment Amount") to ABBOTT if SONUS fails to achieve the
Radiology Milestone on or before the date which is five (5) years
following the Amendment Effective Date. SONUS shall pay to ABBOTT
the Repayment Amount by either, at the option of SONUS:
(i) repaying ABBOTT the Repayment Amount in the form of
cash within ten (10) days following the date which is five
(5) years following the Amendment Effective Date; or
(ii) issuing and delivering to ABBOTT a number of shares
of Common Stock of SONUS equal to the Repayment Amount
pursuant to the terms and conditions of the Securities
Purchase Agreement.
10. SECTION 6.2 - LAUNCH BUDGET REIMBURSEMENT PAYMENTS - shall each be
deleted in its entirety and replaced with the following:
"6.2 Launch Budget Reimbursement Payments. Each calendar quarter
following the First Shipment Date and until the earlier to occur of
either: (a) the last day of the calendar quarter in which achievement of
Net Sales equal to or greater than fifteen million dollars ($15,000,000)
in two (2) consecutive calendar quarters, or (b) December 31, 2002, one
party shall pay to the other party an amount equal to fifty percent
(50%) of the excess of Budget Launch Expenses of one party over the
Budget Launch Expenses of the other party for the same period (e.g. if
ABBOTT has Budget Launch Expenses of $10,002,000 and SONUS has Budget
Launch Expenses of $7,491,000 in the first twelve (12) months of Product
sales, the amount to be paid by SONUS to ABBOTT is $10,002,000 -
$7,491,000 x 50% or $1,255,500). The payment will be made within sixty
(60) days of the end of each calendar quarter for the period the
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launch expenses are incurred. In the case of payment to be made by
SONUS, the amounts payable shall be offset against payments to be made
by ABBOTT to SONUS as set forth in Article 7. In the case of payments to
be made by ABBOTT, the payments will be made by wire transfer. Each
party shall supply to the other party all wire transfer account
information. As used herein, "Budget Launch Expenses" shall mean the
lesser of: (i) the actual cost and expenses incurred by a party related
to the launch of the Product, including, but not limited to costs and
expenses related to technical marketing and medical support, or (ii) the
amount of the costs and expenses set forth in the party's budget as
previously agreed to and approved in writing by the other party."
11. SECTION 6.3 - LOSS CARRY FORWARD. Section 6.3 shall be deleted in its
entirety and replaced with the following:
"6.3 Loss Carry Forward. If a Launch Budget Reimbursement Payment
as calculated in Section 6.2 is to be made by SONUS to ABBOTT and such
Launch Budget Reimbursement Payment has not been fully paid by SONUS to
ABBOTT by the earlier to occur of either: (a) achievement of Net Sales
equal to or greater than fifteen million dollars ($15,000,000) in two
(2) consecutive calendar quarters, or (b) December 31, 2002, then the
unpaid amount shall be carried forward and offset against Revenue
Payments for subsequent quarters until such time as the entire Launch
Budget Reimbursement Payment has been paid or credited to ABBOTT."
12. SECTION 7.1 - CALCULATION OF REVENUE PAYMENTS - shall be amended by
adding to the end thereof the following:
"Anything herein to the contrary notwithstanding, the amount of the
payments to be made by ABBOTT to SONUS as set forth in Article 7 shall
not be reduced by more than fifty percent (50%) in any calendar quarter
as a result of the offsets pursuant to Section 6.2. Any offsets which
otherwise would have been made except for the preceding sentence or for
any other reason shall be carried forward and applied as offsets against
future payments to be made by ABBOTT to SONUS as set forth under Article
7."
13. SECTION 8.3 - PROHIBITION shall be amended by deleting the initial
phrase "With the
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exception of purchase under Section 8.1," and replacing it with the phrase "With
the exception of purchase under the terms of this Agreement or any other written
agreement between SONUS and ABBOTT or ABBOTT's Affiliates".
14. SECTION 16 - NON-COMPETE shall be amended by deleting the first sentence
thereof and replacing it with the following sentence:
"For a period of five (5) years after the Amendment Effective
Date, each party and its Affiliates shall undertake not to market
or sell a competing product in the Territory to an end user."
15. QW7437 RIGHTS AND NEGOTIATION.
As of the Amendment Effective Date, SONUS has under development an
ultrasound diagnostic imaging product within the Field which SONUS has
designated as "QW7437". SONUS and ABBOTT acknowledge and agree that: (i) QW7437
falls within the definition of "Product" set forth in Section 1.16 (although all
specific terms and conditions with respect to QW7437 shall be set forth in a
separate agreement between ABBOTT and SONUS), and (ii) ABBOTT has exclusive
rights to market and sell QW7437. SONUS and ABBOTT shall exert all reasonable
efforts to negotiate in good faith, execute and deliver a separate agreement
with respect to QW7437.
16. REGISTRATION RIGHTS. SONUS shall, prior to or on the Amendment Effective
Date, cause to be amended and restated the Sonus Pharmaceuticals, Inc. Third
Amended and Restated Registration Rights Agreement dated May 15, 1996, as
amended ("Registration Rights Agreement"), to include the shares of Common Stock
issued by SONUS to ABBOTT and Common Stock issuable upon exercise of the
Warrants pursuant to the Agreement, as amended, and the Securities Purchase
Agreement, as "Registrable Securities" as the term "Registrable Securities" is
defined in the Registration Rights Agreement. The effectiveness of this
Amendment shall be conditioned upon the approval, execution and delivery of the
Registration Rights Agreement, amended and restated as set forth in this Section
16 of the Amendment.
17. APPENDICES. Appendices of the Agreement are amended as set forth in the
corresponding Appendices attached to this Amendment.
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18. CONFIDENTIALITY. In the event that this Amendment is to be filed with
the Securities and Exchange Commission, ABBOTT and SONUS shall discuss any
request for confidential treatment of certain financial and other terms of this
Amendment and cooperate in the preparation and filing of any confidential
treatment requests submitted to the Securities and Exchange Commission with
respect to this Amendment.
19. COUNTERPARTS. This Amendment may be executed in any number of
counterparts, each of which shall be deemed an original, but all together shall
constitute one and the same instrument.
20. AMENDED TERMS. Except as expressly modified and amended by this
Amendment, all terms and conditions of the Agreement shall remain in full force
and effect.
IN WITNESS WHEREOF, each of the parties hereto has caused this Agreement
to be executed by its duly authorized representative as of the day and year
first above written.
ABBOTT LABORATORIES SONUS PHARMACEUTICALS, INC.
By: /s/ Richard A. Gonzalez By: /s/ Michael A. Martino
------------------------------- ---------------------------
Richard A. Gonzalez Name: Michael A. Martino
President, Hospital Products Division Title: President
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AMENDED
APPENDIX 1.7
INDICATIONS AND USAGE
AS OF JANUARY 25, 1998
RADIOLOGY INDICATION
An indication for EchoGen(R) Emulsion which is substantially equivalent to the
following: EchoGen(R) Emulsion as indicated for use in adult patients undergoing
ultrasound examination to provide contrast enhancement or facilitate
visualization of anatomic structures, lesions, and normal and abnormal blood
flow patterns during studies of the liver, kidney, and peripheral vasculature.
CARDIOLOGY INDICATION
An indication for EchoGen(R) Emulsion which is substantially equivalent to the
following: EchoGen(R) Emulsion as indicated for use in resting echocardiography
to provide contrast enhancement of ventricular chambers and to improve
endocardial border delineation in patients with suboptimal echoes undergoing
ventricular function and wall motion studies.
AMENDED
APPENDIX 2.3
RESEARCH AND DEVELOPMENT
PAYMENT SCHEDULE
1. Execution of definitive Agreement (May 14, 1996) $4 Million
(Includes $1,000,000 payment for grant of licenses)
2. Quarterly Milestone Payments*
Payment 1 $1 Million
Payment 2 $1 Million
Payment 3 $1 Million
Payment 4 $1 Million
Payment 5 $1 Million
Payment 6 $1 Million
Payment 7 $1 Million
3. Filing NDA** within 15 days $2 Million
within 105 days $1 Million
within 195 days $1 Million
4. NDA acceptance by FDA**
within 15 days $1 Million
within 105 days $1 Million
within 195 days $1 Million
within 285 days $1 Million
5. Advisory Panel Approval**
within 15 days $2 Million
within 105 days $2 Million
6. NDA Approval ** $4 Million
7. First Shipment of Product ** $4 Million
*Payments made on January 1, April 1, July 1, and October 1. Payments
will begin on the first quarter after the Effective Date.
**For one or more indications which are the Cardiology Indication and
Radiology Indication defined in Sections 1.21 and 1.22, respectively. Of
the amount specified in each of item 6 and 7, fifty percent (50%) shall
be earned based on the FDA approval of the NDA for the Cardiology
Indication and fifty percent (50%) shall be earned based on FDA approval
of the NDA for the Radiology Indication. The manner in which these
milestones are earned and paid is further set forth in the Securities
Purchase Agreement.
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APPENDIX 2.4
SECURITIES PURCHASE AGREEMENT
[ATTACHED]
17