SONUS PHARMACEUTICALS INC
EXHIBIT 10.33
<DOCUMENT>
<TYPE>EX-10.33
<SEQUENCE>3
<FILENAME>v79547ex10-33.txt
<DESCRIPTION>EXHIBIT 10.33
<TEXT>
<PAGE>

                                                                   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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<PAGE>

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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<PAGE>

        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


                                       3
<PAGE>
       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).


                                       4
<PAGE>

               (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


                                       5
<PAGE>

        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


                                       6
<PAGE>

               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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<PAGE>

               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:

<TABLE>
<CAPTION>
                                                          Kits as a Maximum
               Following First Shipment Date       Percentage of Total Unit Sales
               -----------------------------       ------------------------------
<S>                                                <C>
               First 12 Months                     100%
               Second 12 Months                    90%
               Third 12 Months                     75%
</TABLE>


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<PAGE>

<TABLE>
<S>                                                <C>
               Fourth 12 Months                    50%
               Fifth 12 Months and remainder of    25%
                      Term of Agreement
</TABLE>

               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


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<PAGE>

               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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<PAGE>

               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


                                       11
<PAGE>

        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


                                       12
<PAGE>

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.


                                       13
<PAGE>

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



                                       14
<PAGE>

                                     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.

<PAGE>

                                     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)

<TABLE>
<S>                                                  <C>
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
</TABLE>

        *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.


                                       16
<PAGE>


                                  APPENDIX 2.4


                          SECURITIES PURCHASE AGREEMENT


                                   [ATTACHED]




                                       17



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