Exhibit 10.02
REGISTRATION RIGHTS AGREEMENT
This REGISTRATION RIGHTS AGREEMENT, dated as of August 15,
2005 (this “Agreement”), is made by and among Sonus Pharmaceuticals, Inc.,
a Delaware corporation, with headquarters located at 22026 20th Avenue S.E.,
Bothell, Washington 98021 (the “Company”),
and the investors named on the signature pages hereto (the “Initial
Investors”).
RECITALS:
A. In
connection with the Securities Purchase Agreement dated August 15, 2005
between the Initial Investors and the Company (the “Purchase Agreement”),
the Company has agreed, upon the terms and subject to the conditions of the
Purchase Agreement, to issue and sell to the Initial Investors 4,651,869 shares
of the Company’s Common Stock (the “Common Shares”) and warrants to
purchase up to 3,023,719 shares of the Company’s Common Stock, subject to
adjustment (the “Warrants” and, collectively with the Common Shares, the
“Securities”).
B. In
order to induce the Initial Investors to execute and deliver the Purchase
Agreement, the Company has agreed to provide certain registration rights under
the Securities Act and applicable state securities laws with respect to the
Securities.
In consideration of the premises and the mutual
covenants contained herein and other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the Company and the
Initial Investors hereby agree as follows:
ARTICLE I
DEFINITIONS
Capitalized terms used and not otherwise defined
herein have the respective meanings given them set forth in the Purchase
Agreement. In addition, as used in this
Agreement, the following terms have the following meanings:
1.1 “Closing
Date” means the date on which the purchase of the Securities is consummated
pursuant to the Purchase Agreement.
1.2 “Common
Shares” means the shares of Common Stock sold pursuant to the Purchase
Agreement.
1.3 “Investors”
means the Initial Investors and any of their transferees or assignees who agree
to become bound by the provisions of this Agreement in accordance with Article IX
hereof.
1.4 “Registrable
Securities” means the Common Shares and the Warrant Shares, and any shares
of capital stock issued or issuable from time to time (with any adjustments) in
exchange for or otherwise with respect to the Common Shares or Warrant Shares
(including shares issued pursuant to Section 2.2 hereof).
1.5 “Registration
Period” means the period between the date of this Agreement and the earlier
of (i) the date on which (x) all of the Registrable Securities have been
sold by the Investors pursuant to the Registration Statement and (y) are freely
tradable under the Securities Act (except
that this clause (y) shall not apply with respect to
Shares sold to affiliates) and no further Registrable Securities may be issued
in the future, (ii) the second anniversary of the last date on which
Warrant Shares are purchased under any then-outstanding Warrants, or (iii) the
date on which all the Registrable Securities may be immediately sold by the
Investors without registration and without restriction as to the number of
Registrable Securities to be sold, pursuant to Rule 144 or otherwise.
1.6 “Registration
Statement” means a Registration Statement of the Company filed under the
Securities Act.
1.7 The
terms “register,” “registered,” and “registration” refer
to a registration effected by preparing and filing a Registration Statement or
statements in compliance with the Securities Act and pursuant to Rule 415
and the declaration or ordering of effectiveness of such Registration Statement
by the SEC.
1.8 “Rule 415”
means Rule 415 under the Securities Act, or any successor Rule providing
for offering securities on a continuous basis, and applicable rules and
regulations thereunder.
1.9 “Securities”
means the Common Shares and the Warrants sold pursuant to the Purchase
Agreement.
1.10 “Warrants”
means the warrants to purchase shares of the Company’s Common Stock, including
the Contingent Warrants, sold pursuant to the Purchase Agreement.
1.11 “Warrant
Shares” means the shares of the Company’s Common Stock, including the
Contingent Warrant Shares, that may be purchased upon exercise of the Warrants.
ARTICLE II
REGISTRATION
2.1 Mandatory
Registration. The Company will use
best efforts to file with the SEC a Registration Statement on Form S-3
registering all of the Registrable Securities, other than the Contingent
Warrant Shares, for resale within 20 days after the Closing Date under the
Purchase Agreement. If Form S-3 is
not available at that time, then the Company will file a Registration Statement
on such form as is then available to effect a registration of all of the
Registrable Securities, other than the Contingent Warrant Shares, subject to
the consent of the Investors, which consent will not be unreasonably withheld. In the event Contingent Warrants are issued
under the Purchase Agreement, the Company will use best efforts to file with
the SEC a Registration Statement on Form S-3 registering all of the
Contingent Warrant Shares for resale within 20 days after the Trigger Date. If Form S-3 is not available at that
time, then the Company will file a Registration Statement on such form as is
then available to effect a registration of all of the Contingent Warrant
Shares, subject to the consent of the Investors, which consent will not be
unreasonably withheld.
2.2 Effectiveness
of the Registration Statement. The
Company will use its best efforts to cause each Registration Statement to be
declared effective by the SEC as soon as practicable after filing, and in any
event no later than the 90th day after (i) the Closing Date, or (ii) with
respect to the Registration Statement for the Contingent Warrant Shares, the
Trigger Date (as applicable, the “Required Effective Date”). However, so long as the Company filed the applicable
Registration Statement within 20 days after (i) the Closing Date, or (ii) with
respect to the Registration Statement
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for the Contingent Warrant Shares, the Trigger Date, (a) if
the SEC takes the position that registration of the resale of the Registrable
Securities by the Investors is not available under applicable laws, rules and
regulation and that the Company must register the offering of the Registrable
Securities as a primary offering by the Company, or (b) if a Registration
Statement receives SEC review, then the Required Effective Date will be the
120th day after the (i) Closing Date, or (ii) with respect to the
Registration Statement for the Contingent Warrant Shares, the Trigger Date. In the case of an SEC response described in
clause (a), the Company will, within 40 business days after the date the
Company receives such SEC response, file a Registration Statement as a primary
offering. The Company’s best efforts
will include, but not be limited to, promptly responding to all comments
received from the staff of the SEC. If
the Company receives notification from the SEC that any Registration Statement
will receive no action or review from the SEC, then the Company will file with
the SEC a request for acceleration in accordance with Rule 461 promulgated
under the Securities Act and cause such Registration Statement to become
effective within five business days after such SEC notification. Once a Registration Statement is declared
effective by the SEC, the Company will cause such Registration Statement to
remain effective throughout the Registration Period, except as permitted under Section 3. On the date of each monthly anniversary of
the date on which any breach of Section 2.1 or this Section 2.2 first
occurs (including failure to file a Registration Statement or to cause a
Registration Statement to be declared effective within the time periods set
forth herein) until the applicable default is cured (each a “Payment Date”),
the Company shall pay to each Investor as damages 1.5% of the purchase price
paid by such Investor pursuant to the Purchase Agreement. Such payment shall be the sole remedy to the
Investors for the Company’s default of Section 2.1 or this Section 2.2
and shall be paid in cash on the applicable Payment Date in accordance with
payment instructions provided by each Investor.
If the Company fails to pay any liquidated damages pursuant to this Section 2.2
in full within seven days after the date payable, the Company will pay interest
thereon at a rate of 10% per annum (or such lesser maximum amount that is
permitted to be paid by applicable law) to each Investor, accruing daily from
the date such liquidated damages are due until such amounts, plus all such
interest thereon, are paid in full.
2.3 Piggyback
Registrations.
(a) If,
at any time prior to the expiration of the Registration Period, a Registration
Statement contemplated in Section 2.1 above is not declared effective with
respect to all of the Registrable Securities to which it applies and the
Company decides to register any of its securities for its own account or for
the account of others, then the Company will promptly give the Investors
written notice thereof and will use its best efforts to include in such
registration all or any part of the Registrable Securities requested by such
Investors to be included therein (excluding any Registrable Securities
previously included in a Registration Statement which has been declared
effective and has not been withdrawn).
This requirement does not apply to Company registrations on Form S-4
or S-8 or their equivalents relating to equity securities to be issued solely
in connection with an acquisition of any entity or business or equity
securities issuable in connection with stock option or other employee benefit
plans. Each Investor must give its
request for registration under this paragraph to the Company in writing within
15 days after receipt from the Company of notice of such pending registration. If the registration for which the Company
gives notice is a public offering involving an underwriting, the Company will
so advise the Investors as part of the above-described written notice. In that event, if the managing underwriter(s)
of the public offering impose a limitation on the number of shares of Common
Stock that may be included in the Registration Statement because, in such
underwriter(s)’ judgment, such limitation would be necessary to effect an
orderly public distribution, then the Company will be obligated to include only
such limited portion, if any, of the Registrable
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Securities with respect to which such Investors have
requested inclusion hereunder. Any
exclusion of Registrable Securities will be made pro rata among all holders of
the Company’s securities seeking to include shares of Common Stock in
proportion to the number of shares of Common Stock sought to be included by
those holders. However, the Company will
not exclude any Registrable Securities unless the Company has first excluded
all outstanding securities the holders of which are not entitled by right to
inclusion of such securities in such Registration Statement or are not entitled
pro rata inclusion with the Registrable Securities. No registration rights that limit or
subordinate the rights of the Investors to register the Registrable Securities
will be granted by the Company until one or more registration statements
covering all of the Registrable Securities have become effective.
(b) No
right to registration of Registrable Securities under this Section 2.3
limits in any way the registration required under Section 2.1 above. The obligations of the Company under this Section 2.3
expire upon the earlier of (i) the effectiveness of the Registration
Statements filed pursuant to Section 2.1 above, (ii) after the
Company has afforded the opportunity for the Investors to exercise registration
rights under this Section 2.3 for two registrations (provided, however,
that any Investor that has had any Registrable Securities excluded from any
Registration Statement in accordance with this Section 2.3 may include in
any additional Registration Statement filed by the Company the Registrable
Securities so excluded), (iii) when all of the Registrable Securities held
by any Investor may be sold by such Investor under Rule 144 without being
subject to any volume restrictions, or (iv) the second anniversary of the
last date on which Warrant Shares are purchased under any then outstanding
Warrants.
2.4 Eligibility
to use Form S-3. The Company
represents and warrants that it meets the requirements for the use of Form S-3
for registration of the sale by the Investors of the Registrable
Securities. The Company will file all
reports required to be filed by the Company with the SEC in a timely manner so
as to preserve its eligibility for the use of Form S-3.
2.5 Sales
by the Company. In no event will the
Company sell shares of Common Stock for its own account pursuant to a
Registration Statement declared effective by the SEC prior to the date that the
Registration Statement registering all of the Registrable Securities, other
than the Contingent Warrant Shares, has been declared effective by the SEC.
ARTICLE III
ADDITIONAL OBLIGATIONS OF THE COMPANY
3.1 Continued
Effectiveness of Registration Statement.
Subject to the limitations set forth in Section 3.6, the Company
will keep each Registration Statement covering the Registrable Securities
effective under Rule 415 at all times during the Registration Period. In the event that the number of shares
available under a Registration Statement filed pursuant to this Agreement is
insufficient to cover all of the Registrable Securities issued, the Company
will (if permitted) amend the Registration Statement or file a new Registration
Statement (on the short form available therefor, if applicable), or both, so as
to cover all of the Registrable Securities.
The Company will file such amendment or new Registration Statement as
soon as practicable, but in no event later than 20 business days after the
necessity therefor arises (based upon the market price of the Common Stock and
other relevant factors on which the Company reasonably elects to rely). The Company will use its best efforts to
cause such amendment or new Registration Statement to become effective as soon
as is practicable after the filing thereof, but in no event later than 90 days
after the date on which the Company reasonably first determines the need
therefor.
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3.2 Accuracy
of Registration Statement. Any
Registration Statement (including any amendments or supplements thereto and
prospectuses contained therein) filed by the Company covering Registrable
Securities will 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, in light of the circumstances in which they were made, not
misleading. The Company will prepare and
file with the SEC such amendments (including post-effective amendments) and
supplements to the Registration Statement and the prospectus used in connection
with the Registration Statement as may be necessary to permit sales pursuant to
the Registration Statement at all times during the Registration Period, and, during
such period, will comply with the provisions of the Securities Act with respect
to the disposition of all Registrable Securities of the Company covered by the
Registration Statement until the termination of the Registration Period, or if
earlier, until such time as all of such Registrable Securities have been
disposed of in accordance with the intended methods of disposition by the
seller or sellers thereof as set forth in the Registration Statement.
3.3 Furnishing
Documentation. The Company will
furnish to each Investor whose Registrable Securities are included in a
Registration Statement, or to its legal counsel, (a) promptly after such
document is filed with the SEC, one copy of any Registration Statement filed
pursuant to this Agreement and any amendments thereto, each preliminary
prospectus and final prospectus and each amendment or supplement thereto; and (b) a
number of copies of a prospectus, including a preliminary prospectus, and all
amendments and supplements thereto, and such other documents as the Investor
may reasonably request in order to facilitate the disposition of the
Registrable Securities owned by the Investor.
The Company will promptly notify by facsimile or email each Investor
whose Registrable Securities are included in any Registration Statement of the
effectiveness of the Registration Statement and any post-effective amendment.
3.4 Additional
Obligations. The Company will use
its best efforts to (a) register and qualify the Registrable Securities
covered by a Registration Statement under such other securities or blue sky
laws of such jurisdictions as each Investor who holds (or has the right to
hold) Registrable Securities being offered reasonably requests, (b) prepare
and file in those jurisdictions any amendments (including post-effective
amendments) and supplements to such registrations and qualifications as may be
necessary to maintain their effectiveness during the Registration Period, (c) take
any other actions necessary to maintain such registrations and qualifications
in effect at all times during the Registration Period, and (d) take any
other actions reasonably necessary or advisable to qualify the Registrable
Securities for sale in such jurisdictions.
Notwithstanding the foregoing, the Company is not required, in connection
with such obligations, to (i) qualify to do business in any jurisdiction
where it would not otherwise be required to qualify but for this Section 3.4,
(ii) subject itself to general taxation in any such jurisdiction, (iii) file
a general consent to service of process in any such jurisdiction, (iv) provide
any undertakings that cause material expense or material burden to the Company,
or (v) make any change in its charter or bylaws, which in each case the
Board of Directors of the Company determines to be contrary to the best
interests of the Company and its stockholders.
3.5 Underwritten
Offerings. If the Investors who hold
a majority in interest of the Registrable Securities being offered in an
offering pursuant to a Registration Statement or any amendment or supplement
thereto under this Agreement select underwriters reasonably acceptable to the
Company for such offering, the Company will enter into and perform its
obligations under an underwriting agreement in usual and customary form
including, without limitation, customary indemnification and contribution
obligations, with the managing underwriter of such offering.
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3.6 Suspension
of Registration.
(a) The
Company will notify (by telephone and also by facsimile and reputable overnight
courier) each Investor who holds Registrable Securities being sold pursuant to
a Registration Statement of the happening of any event of which the Company has
knowledge as a result of which the prospectus included in the Registration
Statement as then in effect includes an untrue statement of a material fact or
omits to state a material fact required to be stated therein or necessary to
make the statements therein, in light of the circumstances under which they
were made, not misleading. The Company
will make such notification as promptly as practicable (but in no event more
than two business days) after the Company becomes aware of the event, will
promptly (but in no event more than ten business days) prepare and file a
supplement or amendment to the Registration Statement to correct such untrue
statement or omission, and will deliver a number of copies of such supplement
or amendment to each Investor as such Investor may reasonably request.
(b) Notwithstanding
the obligations under Section 3.6(a), if in the good faith judgment of the
Company, following consultation with legal counsel, it would be detrimental to
the Company and its stockholders for resales of Registrable Securities to be
made pursuant to the Registration Statement due to the existence of a material
development or potential material development involving the Company which the
Company would be obligated to disclose in the Registration Statement, but which
disclosure would be premature or otherwise inadvisable at such time or would
reasonably be expected to have a material adverse effect upon the Company and
its stockholders, the Company will have the right to suspend the use of the
Registration Statement for a period of not more than thirty (30) days, provided,
however, that the Company may so defer or suspend the use of the Registration
Statement no more than one time in any twelve-month period.
(c) Subject
to the Company’s rights under this Section 3, the Company will use its
best efforts to prevent the issuance of any stop order or other suspension of
effectiveness of a Registration Statement and, if such an order is issued, will
use its best efforts to obtain the withdrawal of such order at the earliest
possible time and to notify each Investor that holds Registrable Securities
being sold (or, in the event of an underwritten offering, the managing
underwriters) of the issuance of such order and the resolution thereof.
(d) Notwithstanding
anything to the contrary contained herein or in the Purchase Agreement, if the
use of the Registration Statement is suspended by the Company, the Company will
promptly (but in no event more than two business days) give notice of the
suspension to all Investors whose securities are covered by the Registration
Statement, and will promptly (but in no event more than two business days)
notify each such Investor as soon as the use of the Registration Statement may
be resumed. Notwithstanding anything to
the contrary contained herein or in the Purchase Agreement, the Company will
cause the Transfer Agent to deliver unlegended shares of Common Stock to a
transferee of an Investor in accordance with the terms of the Purchase
Agreement in connection with any sale of Registrable Securities with respect to
which such Investor has entered into a contract for sale prior to receipt of
notice of such suspension and for which such Investor has not yet settled,
unless otherwise prohibited by law.
3.7 Review
by the Investors. The Company will
permit a single firm of legal counsel, designated by the Investors who hold a
majority in interest of the Registrable Securities being sold pursuant to a
Registration Statement (“Investor’s Counsel”), to review the
Registration Statement and all amendments and supplements thereto (as well as
all requests for acceleration or effectiveness thereof) a reasonable amount of
time (not to exceed three (3) days) prior to their filing with the SEC,
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and will not file any document in a form to which such
counsel reasonably objects, unless otherwise required by law in the opinion of
the Company’s counsel. The sections of
any such Registration Statement including information with respect to the
Investors, the Investors’ beneficial ownership of securities of the Company or
the Investors’ intended method of disposition of Registrable Securities must
conform to the information provided to the Company by each of the Investors or
Investors Counsel.
3.8 Comfort
Letter; Legal Opinion. At the
request of the Investors who hold a majority in interest of the Registrable
Securities being sold pursuant to a Registration Statement, and on the date
that Registrable Securities are delivered to an underwriter for sale in
connection with the Registration Statement, the Company will furnish to the
Investors and the underwriters (i) a letter, dated such date, from the
Company’s independent certified public accountants, in form and substance as is
customarily given by independent certified public accountants to underwriters
in an underwritten public offering, addressed to the underwriters; and (ii) an
opinion, dated such date, from counsel representing the Company for purposes of
the Registration Statement, in form and substance as is customarily given in an
underwritten public offering, addressed to the underwriters and Investors.
3.9 Due
Diligence; Confidentiality.
(a) The
Company will make available for inspection by any Investor whose Registrable
Securities are being sold pursuant to a Registration Statement, any underwriter
participating in any disposition pursuant to the Registration Statement, and
any attorney, accountant or other agent retained by any such Investor or
underwriter (collectively, the “Inspectors”), all pertinent financial
and other records, pertinent corporate documents and properties of the Company
(collectively, the “Records”), as each Inspector reasonably deems
necessary to enable the Inspector to exercise its due diligence
responsibility. The Company will cause
its officers, directors and employees to supply all information that any
Inspector may reasonably request for purposes of performing such due diligence.
(b) Each
Inspector will hold in confidence, and will not make any disclosure (except to
an Investor) of, any Records or other information that the Company determines
in good faith to be confidential, and of which determination the Inspectors are
so notified, unless (i) the disclosure of such Records is necessary to
avoid or correct a misstatement or omission in any Registration Statement, (ii) the
release of such Records is ordered pursuant to a subpoena or other order from a
court or government body of competent jurisdiction, (iii) the information
in such Records has been made generally available to the public other than by
disclosure in violation of this or any other agreement (to the knowledge of the
relevant Inspector), (iv) the Records or other information was developed
independently by an Inspector without breach of this Agreement, (v) the
information was known to the Inspector before receipt of such information from
the Company, or (vi) the information was disclosed to the Inspector by a
third party without restriction. The
Company is not required to disclose any confidential information in the Records
to any Inspector unless and until such Inspector has entered into a
confidentiality agreement (in form and substance reasonably satisfactory to the
Company) with the Company with respect thereto, substantially in the substance
of this Section 3.9(b). Each
Investor will, upon learning that disclosure of Records containing confidential
information is sought in or by a court or governmental body of competent
jurisdiction or through other means, give prompt notice to the Company and
allow the Company, at the Company’s expense, to undertake appropriate action to
prevent disclosure of, or to obtain a protective order for, the Records deemed
confidential. Nothing herein will be
deemed to limit the Investor’s ability to sell Registrable Securities in a
manner that is otherwise consistent with applicable laws and regulations.
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(c) The
Company will hold in confidence, and will not make any disclosure of,
information concerning an Investor provided to the Company under this Agreement
unless (i) disclosure of such information is necessary to comply with
federal or state securities laws, (ii) the disclosure of such information
is necessary to avoid or correct a misstatement or omission in any Registration
Statement, (iii) the release of such information is ordered pursuant to a
subpoena or other order from a court or governmental body of competent
jurisdiction, (iv) such information has been made generally available to
the public other than by disclosure in violation of this Agreement or any other
agreement, (v) the information was disclosed to the Company by a third
party without restriction or (vi) such Investor consents to the form and
content of any such disclosure. If the
Company learns that disclosure of such information concerning an Investor is
sought in or by a court or governmental body of competent jurisdiction or
through other means, the Company will give prompt notice to such Investor prior
to making such disclosure and allow such Investor, at its expense, to undertake
appropriate action to prevent disclosure of, or to obtain a protective order
for, such information.
3.10 Listing. The Company will (i) cause all of the
Registrable Securities covered by each Registration Statement to be listed on
each national securities exchange on which securities of the same class or
series issued by the Company are then listed, if any, if the listing of such
Registrable Securities is then permitted under the rules of such exchange,
or (ii) to the extent the securities of the same class or series are not
then listed on a national securities exchange, secure the designation and
quotation of all of the Registrable Securities covered by each Registration
Statement on Nasdaq.
3.11 Transfer
Agent; Registrar. The Company will
provide a transfer agent and registrar, which may be a single entity, for the
Registrable Securities not later than the effective date of the Registration
Statement.
3.12 Share
Certificates. The Company will
cooperate with the Investors who hold Registrable Securities being sold and
with the managing underwriter(s), if any, to facilitate the timely preparation
and delivery of certificates (not bearing any restrictive legends) representing
Registrable Securities to be offered pursuant to a Registration Statement and
will enable such certificates to be in such denominations or amounts as the
case may be, and registered in such names as the Investors or the managing
underwriter(s), if any, may reasonably request, all in accordance with Article V
of the Purchase Agreement.
3.13 Plan
of Distribution. At the request of
the Investors holding a majority in interest of the Registrable Securities
registered pursuant to a Registration Statement, the Company will promptly
prepare and file with the SEC such amendments (including post-effective
amendments) and supplements to the Registration Statement, and the prospectus
used in connection with the Registration Statement, as may be necessary in
order to change the plan of distribution set forth in such Registration
Statement.
3.14 Securities
Laws Compliance. The Company will
comply with all applicable laws related to any Registration Statement relating
to the offer and sale of Registrable Securities and with all applicable rules and
regulations of governmental authorities in connection therewith (including,
without limitation, the Securities Act, the Exchange Act and the rules and
regulations promulgated by the SEC).
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3.15 Further
Assurances. The Company will take
all other reasonable actions as any Investor or the underwriters, if any, may
reasonably request to expedite and facilitate disposition by such Investor of
the Registrable Securities pursuant to the Registration Statement.
ARTICLE IV
OBLIGATIONS OF THE INVESTORS
4.1 Investor
Information. As a condition to the
obligations of the Company to complete any registration pursuant to this
Agreement with respect to the Registrable Securities of each Investor, such
Investor will furnish to the Company such information regarding itself, the
Registrable Securities held by it and the intended method of disposition of the
Registrable Securities held by it as is reasonably required by the Company to
effect the registration of the Registrable Securities. At least 10 business days prior to the first
anticipated filing date of a Registration Statement for any registration under
this Agreement, the Company will notify each Investor of the information the
Company requires from that Investor if the Investor elects to have any of its
Registrable Securities included in the Registration Statement other than
information contained in the Investor Questionnaire attached hereto as Annex A,
which shall be completed and delivered to the Company no later than five (5) days
after the Closing Date. If, within three
business days prior to the filing date, the Company has not received the
requested information from an Investor, then the Company shall call the
Investor to notify the Investor orally that the Company may exclude such
Investor’s Registrable Securities and the Company may file the Registration
Statement without including Registrable Securities of that Investor.
4.2 Further
Assurances. Each Investor will
cooperate with the Company, as reasonably requested by the Company, in
connection with the preparation and filing of any Registration Statement
hereunder, unless such Investor has notified the Company in writing of such
Investor’s election to exclude all of such Investor’s Registrable Securities
from the Registration Statement.
4.3 Suspension
of Sales. Upon receipt of any notice
from the Company of the happening of any event of the kind described in Section 3.6,
each Investor will immediately discontinue disposition of Registrable
Securities pursuant to the Registration Statement covering such Registrable
Securities until it receives copies of the supplemented or amended prospectus
contemplated by Section 3.6. If so
directed by the Company, each Investor will deliver to the Company (at the
expense of the Company) or destroy (and deliver to the Company a certificate of
destruction) all copies in the Investor’s possession (other than a limited
number of file copies) of the prospectus covering such Registrable Securities
that is current at the time of receipt of such notice.
4.4 Underwritten
Offerings.
(a) If
Investors holding a majority in interest of the Registrable Securities being
registered (with the approval of the Initial Investors) determine to engage the
services of an underwriter, each Investor will enter into and perform such
Investor’s obligations under an underwriting agreement, in usual and customary
form, including, without limitation, customary indemnification and contribution
obligations, with the managing underwriter of such offering, and will take such
other actions as are reasonably required in order to expedite or facilitate the
disposition of the Registrable Securities, unless such Investor has notified
the Company in writing of such Investor’s election to exclude all of its
Registrable Securities from such Registration Statement.
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(b) Without
limiting any Investor’s rights under Section 2.1 hereof, no Investor may
participate in any underwritten distribution hereunder unless such Investor (a) agrees
to sell such Investor’s Registrable Securities on the basis provided in any
underwriting arrangements approved by the Investors entitled hereunder to
approve such arrangements, (b) completes and executes all questionnaires,
powers of attorney, indemnities, underwriting agreements and other documents
reasonably required under the terms of such underwriting arrangements, and (c) agrees
to pay its pro rata share of all underwriting discounts and commissions
applicable with respect to its Registrable Securities.
ARTICLE V
EXPENSES OF REGISTRATION
The Company will bear all expenses, other than
underwriting discounts and commissions, and transfer taxes, if any, incurred in
connection with registrations, filings or qualifications pursuant to Articles
II and III of this Agreement, including, without limitation, all registration, listing
and qualifications fees, printers and accounting fees, the fees and
disbursements of counsel for the Company, and the reasonable fees and
disbursements of one firm of legal counsel selected by the Initial Investors
pursuant to Section 3.7 hereof.
ARTICLE VI
INDEMNIFICATION
In the event that any Registrable Securities are
included in a Registration Statement under this Agreement:
6.1 To
the extent permitted by law, the Company will indemnify, defend and hold
harmless each Investor that holds such Registrable Securities, and agents,
employees, attorneys, accountants, underwriters (as defined in the Securities
Act) for such Investors and any directors or officers of such Investor or such
underwriter and any person who controls such Investor or such underwriter
within the meaning of the Securities Act or the Exchange Act (each, an “Investor
Indemnified Person”) against any losses, claims, damages, expenses or
liabilities (collectively, and together with actions, proceedings or inquiries
by any regulatory or self-regulatory organization, whether commenced or
threatened in respect thereof, “Claims”) to which any of them become
subject under the Securities Act, the Exchange Act or otherwise, insofar as
such Claims arise out of or are based upon any of the following statements,
omissions or violations in a Registration Statement filed pursuant to this
Agreement, any post-effective amendment thereof or any prospectus included
therein: (a) any untrue statement
or alleged untrue statement of a material fact contained in the Registration
Statement or any post-effective amendment thereof or the omission or alleged
omission to state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading, (b) any untrue
statement or alleged untrue statement of a material fact contained in the
prospectus or any preliminary prospectus (as it may be amended or supplemented)
or the omission or alleged omission to state therein any material fact
necessary to make the statements made therein, in light of the circumstances
under which the statements therein were made, not misleading, or (c) any
violation or alleged violation by the Company of the Securities Act, the
Exchange Act or any other law, including without limitation any state
securities law or any rule or regulation thereunder (the matters in the
foregoing clauses (a) through (c) being, collectively, “Violations”). Subject to the restrictions set forth in Section 6.4
with respect to the number of legal counsel, the Company will reimburse the
Investors and each such attorney, accountant, underwriter or controlling person
and each such other Investor Indemnified Person, promptly as such expenses
10
are incurred and are due and payable, for any legal
fees or other reasonable expenses incurred by them in connection with
investigating or defending any Claim.
Notwithstanding anything to the contrary contained herein, the
indemnification agreement contained in this Section 6.1 (i) does not
apply to a Claim by an Investor Indemnified Person arising out of or based upon
a Violation that occurs in reliance upon and in conformity with information
furnished in writing to the Company by such Investor Indemnified Person
expressly for use in the Registration Statement or any such amendment thereof
or supplement thereto, if such prospectus or supplement thereto was timely made
available by the Company pursuant to Section 3.3 hereof; and (ii) does
not apply to amounts paid in settlement of any Claim if such settlement is made
without the prior written consent of the Company, which consent will not be
unreasonably withheld. This indemnity obligation will remain in full force and
effect regardless of any investigation made by or on behalf of the Indemnified
Persons and will survive the transfer of the Registrable Securities by the
Investors under Article IX of this Agreement.
6.2 In
connection with any Registration Statement in which an Investor is
participating, absent any negligence or intentional misconduct of the Company, each
such Investor will indemnify and hold harmless, to the same extent and in the
same manner set forth in Section 6.1 above, the Company, each of its
directors, each of its officers who signs the Registration Statement, each person,
if any, who controls the Company within the meaning of the Securities Act or
the Exchange Act, and any other stockholder selling securities pursuant to the
Registration Statement or any of its directors or officers or any person who
controls such stockholder within the meaning of the Securities Act or the
Exchange Act (each a “Company Indemnified Person”) against any Claim to
which any of them may become subject under the Securities Act, the Exchange Act
or otherwise, insofar as such Claim arises out of or is based upon any
Violation, in each case to the extent (and only to the extent) that such
Violation occurs in reliance upon and in conformity with written information
furnished to the Company by such Investor expressly for use in such Registration
Statement. Subject to the restrictions
set forth in Section 6.4 with respect to the number of legal counsel, such
Investor will promptly reimburse each Company Indemnified Person for any legal
or other expenses (promptly as such expenses are incurred and due and payable)
reasonably incurred by them in connection with investigating or defending any
such Claim. However, the indemnity
agreement contained in this Section 6.2 does not apply to amounts paid in
settlement of any Claim if such settlement is effected without the prior
written consent of such Investor, which consent will not be unreasonably
withheld, and no Investor will be liable under this Agreement (including this Section 6.2
and Article VII) for the amount of any Claim that exceeds the net proceeds
actually received by such Investor as a result of the sale of Registrable
Securities pursuant to such Registration Statement. This indemnity will remain in full force and
effect regardless of any investigation made by or on behalf of a Company Indemnified
Party and will survive the transfer of the Registrable Securities by the
Investors under Article IX of this Agreement.
6.3 If
any proceeding shall be brought or asserted against any person entitled to
indemnity under Sections 6.1 or 6.2 hereof (an “Indemnified Party”),
such Indemnified Party promptly shall notify the person from whom indemnity is
sought (the “Indemnifying Party”) in writing, and the Indemnifying Party
shall assume the defense thereof, including the employment of counsel
reasonably satisfactory to the Indemnified Party and the payment of all
reasonable fees and expenses incurred in connection with defense thereof;
provided, however, that the failure of any Indemnified Party to give such
notice shall not relieve the Indemnifying Party of its obligations or
liabilities pursuant to this Agreement, except (and only) to the extent that it
shall be finally determined by a court of competent jurisdiction (which
determination is not subject to appeal or further review) that such failure
shall have proximately and materially adversely prejudiced the Indemnifying
Party.
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6.4 An
Indemnified Party shall have the right to employ separate counsel in any such
proceeding and to participate in the defense thereof, but the fees and expenses
of such counsel shall be at the expense of such Indemnified Party or
Indemnified Parties unless: (i) the Indemnifying Party has agreed in
writing to pay such fees and expenses; (ii) the Indemnifying Party shall
have failed promptly to assume the defense of such proceeding and to employ
counsel reasonably satisfactory to such Indemnified Party in any such
proceeding; or (iii) the named parties to any such proceeding (including
any impleaded parties) include both such Indemnified Party and the Indemnifying
Party, and such Indemnified Party shall have been advised by counsel that a
conflict of interest is likely to exist if the same counsel were to represent
such Indemnified Party and the Indemnifying Party (in which case, if such
Indemnified Party notifies the Indemnifying Party in writing that it elects to
employ separate counsel at the expense of the Indemnifying Party, the
Indemnifying Party shall not have the right to assume the defense thereof and
such counsel shall be at the reasonable expense of the Indemnifying Party;
provided, however, that in no event shall the Indemnifying Party be responsible
for the fees and expenses of more than one separate counsel). The Indemnifying Party shall not be liable
for any settlement of any such proceeding effected without its written consent,
which consent shall not be unreasonably withheld. No Indemnifying Party shall, without the
prior written consent of the Indemnified Party, effect any settlement of any
pending proceeding in respect of which any Indemnified Party is a party, unless
such settlement includes an unconditional release of such Indemnified Party
from all liability on Claims that are the subject matter of such proceeding.
6.5 Subject
to the foregoing, all reasonable fees and expenses of the Indemnified Party
(including fees and expenses to the extent incurred in connection with
investigating or preparing to defend such proceeding in a manner not
inconsistent with this Section) shall be paid to the Indemnified Party, as
incurred, within ten (10) Business Days of written notice thereof to the
Indemnifying Party, which notice shall be delivered no more frequently than on
a monthly basis (regardless of whether it is ultimately determined that an
Indemnified Party is not entitled to indemnification hereunder; provided, that
the Indemnifying Party may require such Indemnified Party to undertake to
reimburse all such fees and expenses to the extent it is finally judicially
determined that such Indemnified Party is not entitled to indemnification
hereunder).
ARTICLE VII
CONTRIBUTION
To the extent that any indemnification provided for
herein is prohibited or limited by law, the indemnifying party will make the
maximum contribution with respect to any amounts for which it would otherwise
be liable under Article VI to the fullest extent permitted by law. However, (a) no contribution will be
made under circumstances where the maker would not have been liable for
indemnification under the fault standards set forth in Article VI (without
giving effect to any prohibition or limitation or indemnification under
applicable law), (b) no person guilty of fraudulent misrepresentation
(within the meaning of Section 11(f) of the Securities Act) will be
entitled to contribution from any person who was not guilty of such fraudulent
misrepresentation, and (c) contribution (together with any indemnification
or other obligations under this Agreement) by any seller of Registrable
Securities will be limited in amount to the net amount of proceeds received by
such seller from the sale of such Registrable Securities.
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ARTICLE VIII
EXCHANGE ACT REPORTING
In order to make available to the Investors the
benefits of Rule 144 or any similar rule or regulation of the SEC
that may at any time permit the Investors to sell securities of the Company to
the public without registration, the Company will:
(a) File
with the SEC in a timely manner, and make and keep available, all reports and
other documents required of the Company under the Securities Act and the
Exchange Act so long as the Company remains subject to such requirements (it
being understood that nothing herein limits the Company’s obligations under Section 4.3
of the Purchase Agreement) and file and make available of such reports and
other documents as required for the applicable provisions of Rule 144; and
(b) Furnish
to each Investor, so long as such Investor holds Registrable Securities,
promptly upon the Investor’s request, (i) a written statement by the
Company that it has complied with the reporting requirements of Rule 144,
the Securities Act and the Exchange Act, (ii) a copy of the most recent
annual or quarterly report of the Company and such other reports and documents
filed by the Company with the SEC and (iii) such other information as may
be reasonably requested to permit the Investors to sell such securities
pursuant to Rule 144 without registration.
ARTICLE IX
ASSIGNMENT OF REGISTRATION RIGHTS
The rights of the Initial Investors hereunder,
including the right to have the Company register Registrable Securities
pursuant to this Agreement, may be assigned by the Initial Investors to
transferees or assignees of all or any portion of the Registrable Securities,
but only if (a) the Investor agrees in writing with the transferee or
assignee to assign such rights, and a copy of such agreement is furnished to
the Company within a reasonable time after such assignment, (b) the
Company is, within a reasonable time after such transfer or assignment,
furnished with written notice of the name and address of such transferee or
assignee and the securities with respect to which such registration rights are
being transferred or assigned, (c) after such transfer or assignment, the
further disposition of such securities by the transferee or assignee is
restricted under the Securities Act and applicable state securities laws, (d) at
or before the time the Company received the written notice contemplated by
clause (b) of this sentence, the transferee or assignee agrees in writing
with the Company to be bound by all of the provisions contained herein, (e) such
transfer is made in accordance with the applicable requirements of the Purchase
Agreement, and (f) the transferee is an “accredited investor” as that term
is defined in Rule 501 of Regulation D.
ARTICLE X
AMENDMENT OF REGISTRATION RIGHTS
This Agreement may be amended and the obligations
hereunder may be waived (either generally or in a particular instance, and
either retroactively or prospectively) only with the written consent of the
Company and of the Investors who then hold a majority interest of the
Registrable Securities. Any amendment or
waiver effected in accordance with this Article X is binding upon each
Investor and the Company.
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ARTICLE XI
MISCELLANEOUS
11.1 Conflicting
Instructions. A person or entity is
deemed to be a holder of Registrable Securities whenever such person or entity
owns of record such Registrable Securities.
If the Company receives conflicting instructions, notices or elections
from two or more persons or entities with respect to the same Registrable
Securities, the Company will act upon the basis of instructions, notice or
election received from the registered owner of such Registrable Securities.
11.2 Notices. Any notices required or permitted to be given
under the terms of this Agreement will be given as set forth in the Purchase
Agreement.
11.3 Waiver. Failure of any party to exercise any right or
remedy under this Agreement or otherwise, or delay by a party in exercising
such right or remedy, does not operate as a waiver thereof.
11.4 Governing
Law. This Agreement will be governed
by and interpreted in accordance with the laws of the State of New York without
regard to the principles of conflict of laws.
The parties hereto hereby submit to the exclusive jurisdiction of the
United States federal and state courts located in the State of New York with
respect to any dispute arising under this Agreement, the agreements entered
into in connection herewith or the transactions contemplated hereby or thereby.
EACH PARTY HEREBY IRREVOCABLY WAIVES ANY RIGHT THAT IT MAY HAVE TO, AND
AGREES NOT TO REQUEST, A JURY TRIAL FOR THE ADJUDICATION OF ANY DISPUTE
HEREUNDER OR IN CONNECTION HEREWITH OR WITH ANY TRANSACTION CONTEMPLATED
HEREBY.
11.5 Severability. If any provision of this Agreement is invalid
or unenforceable under any applicable statute or rule of law, then such
provision will be deemed modified in order to conform with such statute or rule of
law. Any provision hereof that may prove
invalid or unenforceable under any law will not affect the validity or
enforceability of any other provision hereof.
11.6 Entire
Agreement. This Agreement and the
Purchase Agreement (including all schedules and exhibits thereto) constitute
the entire agreement among the parties hereto with respect to the subject
matter hereof and thereof. There are no
restrictions, promises, warranties or undertakings, other than those set forth
or referred to herein or therein. This
Agreement supersedes all prior agreements and understandings among the parties
hereto with respect to the subject matter hereof.
11.7 Successors
and Assigns. Subject to the
requirements of Article IX hereof, this Agreement inures to the benefit of
and is binding upon the successors and assigns of each of the parties
hereto. Notwithstanding anything to the
contrary herein, including, without limitation, Article IX, the rights of
an Investor hereunder are assignable to and exercisable by a bona fide pledgee
of the Registrable Securities in connection with an Investor’s margin or
brokerage accounts.
11.8 Headings. The headings of this Agreement are for
convenience of reference only, are not part of this Agreement and do not affect
its interpretation.
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11.9 Counterparts. This Agreement may be executed in two or more
counterparts, each of which is deemed an original but all of which constitute
one and the same agreement. This Agreement,
once executed by a party, may be delivered to the other party hereto by
facsimile transmission, and facsimile signatures are binding on the parties
hereto.
11.10 Further
Assurances. Each party will do and
perform, or cause to be done and performed, all such further acts and things,
and will execute and deliver all other agreements, certificates, instruments
and documents, as another party may reasonably request in order to carry out
the intent and accomplish the purposes of this Agreement and the consummation
of the transactions contemplated hereby.
11.11 Consents. Unless otherwise provided in this Agreement,
all consents and other determinations to be made by the Investors pursuant to
this Agreement will be made by the Investors holding a majority in interest of
the Registrable Securities.
11.12 No Strict
Construction. The language used in
this Agreement is deemed to be the language chosen by the parties to express
their mutual intent, and no rules of strict construction will be applied
against any party.
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IN WITNESS WHEREOF, the undersigned Investors and the
Company have caused this Registration Rights Agreement to be duly executed as
of the date first above written.
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COMPANY:
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SONUS PHARMACEUTICALS, INC.
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By:
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/s/ Michael A.
Martino
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Name:
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Michael A. Martino
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Title:
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President and CEO
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OMNIBUS SIGNATURE PAGE TO
SONUS PHARMACEUTICALS, INC.
REGISTRATION RIGHTS AGREEMENT
The undersigned hereby executes and delivers the
Registration Rights Agreement to which this Signature Page is attached,
which, together with all counterparts of the Agreement and Signature Pages of
the other parties named in said Agreement, shall constitute one and the same
document in accordance with the terms of the Agreement.
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Sign Name:
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Print Name:
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Address:
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Telephone:
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Facsimile:
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Number of Common Shares:
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Number of Warrant Shares:
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ANNEX A
Sonus Pharmaceuticals, Inc.
Selling Securityholder Notice and Questionnaire
The undersigned beneficial owner of common stock,
$.001 par value per share (the “Common Stock”), of Sonus Pharmaceuticals, Inc.
(the “Company”), (the “Registrable Securities”) understands that
the Company has filed or intends to file with the Securities and Exchange
Commission (the “Commission”) a registration statement on Form S-3
(the “Registration Statement”) for the registration and resale under Rule 415
of the Securities Act of 1933, as amended (the “Securities Act”), of the
Registrable Securities, in accordance with the terms of the Registration Rights
Agreement, dated as of August , 2005
(the “Registration Rights Agreement”), among the Company and the
Purchasers named therein. A copy of the
Registration Rights Agreement is available from the Company upon request at the
address set forth below. All capitalized
terms not otherwise defined herein shall have the meanings ascribed thereto in
the Registration Rights Agreement.
Certain legal consequences arise from being named as a
selling securityholder in the Registration Statement and the related
prospectus. Accordingly, holders and
beneficial owners of Registrable Securities are advised to consult their own
securities law counsel regarding the consequences of being named or not being
named as a selling securityholder in the Registration Statement and the related
prospectus.
NOTICE
The undersigned beneficial owner (the “Selling
Securityholder”) of Registrable Securities hereby elects to include the
Registrable Securities owned by it and listed below in Item 3 (unless otherwise
specified under such Item 3) in the Registration Statement.
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The undersigned hereby
provides the following information to the Company and represents and warrants
that such information is accurate:
QUESTIONNAIRE
1. Name.
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(a)
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Full Legal Name of Selling Securityholder
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(b)
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Full Legal Name of Registered Holder (if not the
same as (a) above) through which Registrable Securities Listed in Item 3
below are held:
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(c)
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Full Legal Name of Natural Control Person (which
means a natural person who directly or indirectly alone or with others has power
to vote or dispose of the securities covered by the questionnaire):
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2. Address for Notices to Selling
Securityholder:
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Telephone:
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Fax:
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Contact Person:
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3.
Beneficial Ownership of Registrable Securities:
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(a)
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Type and Amount of Registrable Securities
beneficially owned:
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4.
Broker-Dealer Status:
(a) Are
you a broker-dealer?
Yes o No o
Note: If yes, the
Commission’s staff has indicated that you should be identified as an
underwriter in the Registration Statement.
(b) Are
you an affiliate of a broker-dealer?
Yes o No o
(c) If
you are an affiliate of a broker-dealer, do you certify that you bought the
Registrable Securities in the ordinary course of business, and at the time of
the purchase of the Registrable Securities to be resold, you had no agreements
or understandings, directly or indirectly, with any person to distribute the
Registrable Securities?
Yes o No o
Note: If no, the
Commission’s staff has indicated that you should be identified as an
underwriter in the Registration Statement.
5.
Beneficial Ownership of Other Securities of the Company Owned by the
Selling Securityholder.
Except as set forth below in this
Item 5, the undersigned is not the beneficial or registered owner of any
securities of the Company other than the Registrable Securities listed above in
Item 3.
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(a)
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Type and Amount of Other Securities beneficially
owned by the Selling Securityholder:
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6.
Relationships with the Company:
Except as set forth below, neither
the undersigned nor any of its affiliates, officers, directors or principal
equity holders (owners of 5% of more of the equity securities of the
undersigned) has held any position or office or has had any other material
relationship with the Company (or its predecessors or affiliates) during the
past three years.
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State any exceptions here:
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The undersigned agrees to promptly notify the Company
of any inaccuracies or changes in the information provided herein that may
occur subsequent to the date hereof at any time while the Registration
Statement remains effective.
By signing below, the undersigned consents to the
disclosure of the information contained herein in its answers to Items 1
through 6 and the inclusion of such information in the Registration Statement
and the related prospectus. The
undersigned understands that such information will be relied upon by the
Company in connection with the preparation or amendment of the Registration
Statement and the related prospectus.
IN WITNESS WHEREOF the undersigned, by authority duly
given, has caused this Notice and Questionnaire to be executed and delivered
either in person or by its duly authorized agent.
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Dated:
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Beneficial Owner:
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By:
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Name:
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Title:
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