<SUBMISSION>
<ACCESSION-NUMBER>0000891020-03-002069
<TYPE>8-K
<PUBLIC-DOCUMENT-COUNT>6
<PERIOD>20030728
<ITEMS>5
<ITEMS>7
<FILING-DATE>20030808
<FILER>
<COMPANY-DATA>
<CONFORMED-NAME>SONUS PHARMACEUTICALS INC
<CIK>0000949858
<ASSIGNED-SIC>2835
<IRS-NUMBER>954343413
<STATE-OF-INCORPORATION>DE
<FISCAL-YEAR-END>1231
</COMPANY-DATA>
<FILING-VALUES>
<FORM-TYPE>8-K
<ACT>34
<FILE-NUMBER>000-21243
<FILM-NUMBER>03830712
</FILING-VALUES>
<BUSINESS-ADDRESS>
<STREET1>22026 2OTH AVE SE
<STREET2>STE 102
<CITY>BOTHELL
<STATE>WA
<ZIP>98021
<PHONE>2064879500
</BUSINESS-ADDRESS>
<MAIL-ADDRESS>
<STREET1>22026 20TH AVENUE SE, SUITE 102
<CITY>BOTHELL
<STATE>WA
<ZIP>98021
</MAIL-ADDRESS>
</FILER>
<DOCUMENT>
<TYPE>8-K
<SEQUENCE>1
<FILENAME>v92220e8vk.htm
<DESCRIPTION>FORM 8-K
<TEXT>
<HTML>
<HEAD>
<TITLE>Sonus Pharmaceuticals</TITLE>
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<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>

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<P align="center"><FONT size="4"><B>UNITED STATES<BR>
SECURITIES AND EXCHANGE COMMISSION</B>
</FONT>

<P align="center"><FONT size="3"><B>Washington, D.C. 20549</B>
</FONT>

<P align="center"><FONT size="5"><B>FORM 8-K</B>
</FONT>

<P align="center"><FONT size="3"><B>CURRENT REPORT<BR>
Pursuant to Section&nbsp;13 or 15(d) of the<BR>
Securities Exchange Act of 1934</B>
</FONT>

<P align="center"><FONT size="2">Date of Report (Date of earliest event reported) <B>July&nbsp;28, 2003</B>
</FONT>
<P>
<DIV align="center"><FONT size="6"><B>SONUS PHARMACEUTICALS, INC.</B>
</FONT></DIV>


<HR width="70%" align="center" size="1" noshade>

<DIV align="center"><FONT size="2">(Exact name of Registrant as specified in charter)
</FONT></DIV>
<CENTER>
<TABLE cellspacing="0" border="0" cellpadding="0" width="65%">
<TR valign="bottom">
    <TD width="34%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="28%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="28%">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD align="center" valign="top"><FONT size="2">Delaware<BR>
(State or other jurisdiction<BR>
of incorporation)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="center" valign="top"><FONT size="2">
0-26866<BR>
(Commission<BR>
File Number)
</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="center" valign="top"><FONT size="2">95-4343413<BR>
(I.R.S. Employer<BR>
Identification No.)</FONT></TD>
</TR>
</TABLE>
</CENTER>
<P align="center"><FONT size="2"><B>22026 20th Avenue S.E.<BR>
Bothell, Washington 98021</B><BR>
(Address of principal executive offices and zip code)
</FONT>

<P align="center"><FONT size="2"><B>(425)&nbsp;487-9500</B><BR>
(Registrant&#146;s telephone number, including area code)
</FONT>

<P align="center"><FONT size="2"><B>Not Applicable</B><BR>
(Former name or former address, if changed, since last report)
</FONT>

<P>
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<A name="toc"><DIV align="CENTER" style="page-break-before:always"><U><B>TABLE OF CONTENTS</B></U></DIV></A>

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<TR><TD></TD><TD colspan="8"><A HREF="#000">ITEM 5. OTHER EVENTS AND REGULATION FD DISCLOSURE</A></TD></TR>
<TR><TD></TD><TD colspan="8"><A HREF="#001">ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS</A></TD></TR>
<TR><TD colspan="9"><A HREF="#002">SIGNATURES</A></TD></TR>
<TR><TD colspan="9"><A HREF="#003">EXHIBIT INDEX</A></TD></TR>
<TR><TD colspan="9"><A HREF="v92220exv4w1.txt">EXHIBIT 4.1</A></TD></TR>
<TR><TD colspan="9"><A HREF="v92220exv10w1.txt">EXHIBIT 10.1</A></TD></TR>
<TR><TD colspan="9"><A HREF="v92220exv10w2.txt">EXHIBIT 10.2</A></TD></TR>
<TR><TD colspan="9"><A HREF="v92220exv99w1.htm">EXHIBIT 99.1</A></TD></TR>
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<!-- link2 "ITEM 5. OTHER EVENTS AND REGULATION FD DISCLOSURE" -->
<DIV align="left"><A NAME="000"></A></DIV>
<P align="left"><FONT size="2"><B>ITEM 5. OTHER EVENTS AND REGULATION FD DISCLOSURE.</B>
</FONT>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;On July&nbsp;29, 2003, Sonus Pharmaceuticals, Inc., a Delaware corporation
(&#147;Sonus&#148;), issued a press release announcing that it raised approximately $14.2
million in gross proceeds through a private placement to accredited investors
of approximately 3.9&nbsp;million shares of Sonus Common Stock and warrants to
purchase approximately 1.95&nbsp;million shares of Sonus Common Stock. The Common
Stock was sold at a price of $3.56 per share. The warrants were sold at a
price of $0.125 per share underlying each warrant and have an exercise price of
$4.09 per share. A copy of the press release is attached hereto as Exhibit
99.1.
</FONT>
<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Securities issued in the private placement have not been registered
under the Securities Act of 1933, as amended, and until so registered the
Securities may not be offered or sold in the United States absent registration
or availability of an applicable exemption from registration. Pursuant to a
Registration Rights Agreement, Sonus is required to prepare and file with the
Securities and Exchange Commission, within 30&nbsp;days after the closing date, a
registration statement for the purpose of registering for resale all of the
shares of Sonus&#146; Common Stock sold and issuable upon exercise of the warrants
sold in the private placement.
</FONT>
<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The foregoing description of the private placement does not purport to be
complete and is qualified in its entirety by reference to the Securities
Purchase Agreement dated July&nbsp;25, 2003, which is attached hereto as Exhibit
10.1, the Registration Rights Agreement dated July&nbsp;25, 2003, which is attached
hereto as Exhibit&nbsp;10.2, and the form of Purchase Warrant attached hereto as
Exhibit&nbsp;4.1, each of which is incorporated herein by this reference.
</FONT>
<!-- link2 "ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS" -->
<DIV align="left"><A NAME="001"></A></DIV>
<P align="left"><FONT size="2"><B>ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS.</B>
</FONT>

<P>
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    <TD width="1%" align="left" nowrap><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="93%"><FONT size="2">(a)-(b) Not applicable.</FONT></TD>
</TR>
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    <TD width="1%">&nbsp;</TD>
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    <TD nowrap align="center"><FONT size="1"><B>(c)</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>Exhibits.</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
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    <TD nowrap align="center">&nbsp;</TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD colspan="3">&nbsp;</TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
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    <TD><FONT size="1">&nbsp;</FONT></TD>
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    <TD valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right" valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top"><FONT size="2">
4.1</FONT></TD>
    <TD valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">Form of Purchase Warrant issued by the Company to
each investor dated July&nbsp;28, 2003.</FONT></TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right" valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right" valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top"><FONT size="2">
10.1</FONT></TD>
    <TD valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">Securities Purchase Agreement by and among the
Company and the investors named therein, dated July&nbsp;25, 2003.</FONT></TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right" valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right" valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top"><FONT size="2">
10.2</FONT></TD>
    <TD valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">Registration Rights Agreement by and among the
Company and the investors named therein, dated July&nbsp;25, 2003.</FONT></TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right" valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right" valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top"><FONT size="2">
99.1</FONT></TD>
    <TD valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">Press Release of Sonus Pharmaceuticals, Inc.
issued on July&nbsp;29, 2003, announcing $14.2&nbsp;million private
placement financing.</FONT></TD>
</TR>
</TABLE>
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<P align="center"><FONT size="2">&nbsp;</FONT>
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<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>

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<DIV align="left"><A NAME="002"></A></DIV>
<P align="center"><FONT size="2"><B>SIGNATURES</B>
</FONT>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
</FONT>
<CENTER>
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    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">
SONUS PHARMACEUTICALS, INC.</FONT></TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><FONT size="2">Dated: August&nbsp;8, 2003</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">
/s/ Richard J. Klein<BR></FONT></TD>
</TR>
<TR>
    <TD valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">
<HR size="1" noshade width="50%"></FONT></TD>
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<TR valign="bottom">
    <TD valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">
Richard J. Klein<BR>
Chief Financial Officer<BR>
(Principal Financial and Accounting Officer)</FONT></TD>
</TR>
</TABLE>
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<!-- link1 "EXHIBIT INDEX" -->
<DIV align="left"><A NAME="003"></A></DIV>
<P align="center"><FONT size="2"><B>EXHIBIT INDEX</B>
</FONT>

<CENTER>
<TABLE cellspacing="0" border="0" cellpadding="0" width="100%">
<TR valign="bottom">
    <TD width="12%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="83%">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD nowrap align="center"><FONT size="1"><B>Exhibit Number</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center"><FONT size="1"><B>Description</B></FONT></TD>
</TR>
<TR valign="bottom">
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    <TD><FONT size="1">&nbsp;</FONT></TD>
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<TR valign="bottom">
    <TD valign="top" align="center"><FONT size="2">4.1</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">
Form of Purchase Warrant issued by the Company to
each investor dated July&nbsp;28, 2003.</FONT></TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD valign="top" align="center"><FONT size="2">10.1</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">
Securities Purchase Agreement by and among the
Company and the investors named therein, dated July
25, 2003.</FONT></TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD align="center" valign="top"><FONT size="2">10.2</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">
Registration Rights Agreement by and among the
Company and the investors named therein, dated July
25, 2003.</FONT></TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD valign="top" align="center"><FONT size="2">99.1</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">
Press Release of Sonus Pharmaceuticals, Inc.
issued on July&nbsp;29, 2003, announcing $14.2&nbsp;million
private placement financing.</FONT></TD>
</TR>
</TABLE>
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<TYPE>EX-4.1
<SEQUENCE>3
<FILENAME>v92220exv4w1.txt
<DESCRIPTION>EXHIBIT 4.1
<TEXT>
<PAGE>
                                                                     Exhibit 4.1

                  THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
         REGISTERED UNDER THE SECURITIES ACT OF 1933 OR ANY STATE SECURITIES
         LAWS AND MAY NOT BE SOLD, EXCHANGED, HYPOTHECATED OR TRANSFERRED IN ANY
         MANNER EXCEPT PURSUANT TO A REGISTRATION OR AN EXEMPTION FROM SUCH
         REGISTRATION.

                                PURCHASE WARRANT

                                   Issued to:
                          _____________________________

                             Exercisable to Purchase

                        _________ Shares of Common Stock

                                       of

                           SONUS PHARMACEUTICALS, INC.

                            Void after July __, 2008

<PAGE>

         This is to certify that, for the value described herein and subject to
the terms and conditions set forth below, the Warrantholder is entitled to
purchase, and the Company promises and agrees to sell and issue to the
Warrantholder, at any time on or after July , 2003 (the "Effective Date"),
pursuant to Section 3 hereof, up to _________ shares of the Company's Common
Stock at the Exercise Price.

         This Warrant certificate is issued subject to the following terms and
conditions:

         1.       Definitions of Certain Terms. Except as may be otherwise
clearly required by the context, the following terms have the following
meanings:

                  (a)      "Common Stock" means the common stock, $0.001 par
value, of the Company.

                  (b)      "Company" means Sonus Pharmaceuticals, Inc., a
Delaware corporation.

                  (c)      "Effective Date" has the meaning set forth in the
preamble to this Agreement.

                  (d)      "Exercise Period" means the period of time commencing
on the Effective Date and ending at 5 p.m. Pacific Time on the fifth anniversary
of the Effective Date during the Exercise Period.

                  (e)      "Exercise Price" means the price at which the
Warrantholder may purchase one Share upon exercise of Warrants as determined
from time to time pursuant to the provisions hereof. The initial Exercise Price
is $4.09 per Share, which is equal to 115% of the purchase price per share of
Common Stock paid by Warrantholder under the Securities Purchase Agreement.

                  (f)      "Securities Act" means the Securities Act of 1933, as
amended.

                  (g)      "Securities Purchase Agreement" means the Securities
Purchase Agreement dated as of July 25, 2003 among the Company and the Investors
referenced therein.

                  (h)      "Share" or "Shares" refers to one or more shares of
Common Stock issuable on exercise of the Warrant.

                  (i)      "Warrant" means the warrant evidenced by this
certificate or any certificate obtained upon transfer or partial exercise of the
Warrant evidenced by any such certificate.

                  (j)      "Warrantholder" means a record holder of the Warrant
or Shares. The initial Warrantholder is ____________________.

         2.       Purchase of Warrant. Concurrently with the issuance hereof,
the Warrantholder shall pay to the Company as consideration for the Warrant the
sum of $0.125 per Share issuable upon exercise of the Warrant, or $________ in
the aggregate.

                                       2

<PAGE>

         3.       Exercise of Warrants. All or any part of the Warrant may be
exercised during the Exercise Period by surrendering the Warrant, together with
appropriate instructions, duly executed by the Warrantholder or by its duly
authorized attorney, and delivery of payment in full by the Warrantholder, in
lawful money of the United States, of the Exercise Price payable with respect to
the Shares being purchased at the office of the Company, 22026 20th Avenue S.E.,
Bothell, Washington, 98021, Attention: President, or at such other office or
agency as the Company may designate. The date on which such instructions and the
Exercise Price are received by the Company shall be the date of exercise. Upon
receipt of notice of exercise and the Exercise Price, the Company shall
immediately instruct its transfer agent to prepare certificates for the Shares
to be received by the Warrantholder and shall use commercially reasonable
efforts to cause such certificates to be prepared and delivered to the
Warrantholder in accordance with the Warrantholder's instructions within three
business days after the date of exercise. If the Warrantholder shall provide the
Company with an opinion of counsel to the effect that the legend set forth on
the face of this Warrant is not required, such certificates shall not bear a
legend with respect to the Securities Act.

         If fewer than all the Shares purchasable under the Warrant are
purchased, the Company will, upon such partial exercise, execute and deliver to
the Warrantholder a new Warrant certificate (dated the date hereof), in form and
tenor similar to this Warrant certificate, evidencing that portion of the
Warrant not exercised. The Shares to be obtained on exercise of the Warrant will
be deemed to have been issued, and any person exercising the Warrants will be
deemed to have become a holder of record of those Shares, as of the date of the
payment of the Exercise Price.

         4.       Adjustments in Certain Events. The number, class, and price of
the Shares for which this Warrant is exercisable are subject to adjustment from
time to time upon the happening of certain events as follows:

                  (a)      If the outstanding shares of the Company's Common
Stock are divided into a greater number of shares or a dividend in stock is paid
on the Common Stock, the number of Shares for which the Warrant is then
exercisable will be proportionately increased and the Exercise Price will be
proportionately reduced; and, conversely, if the outstanding shares of Common
Stock are combined into a smaller number of shares of Common Stock, the number
of Shares for which the Warrant is then exercisable will be proportionately
reduced and the Exercise Price will be proportionately increased. The increases
and reductions provided for in this subsection 4(a) will be made with the intent
and, as nearly as practicable, the effect that neither the percentage of the
total equity of the Company obtainable on exercise of the Warrants nor the price
payable for such percentage upon such exercise will be affected by any event
described in this subsection 4(a).

                  (b)      In case of any change in the Common Stock through
merger, consolidation, reclassification, reorganization, partial or complete
liquidation, purchase of substantially all the assets of the Company, or other
change in the capital structure of the Company, then, as a condition of such
change, lawful and adequate provision will be made so that the holder of this
Warrant will have the right thereafter to receive upon the exercise of the
Warrant the kind and amount of shares of stock or other securities or property
to which he would have been entitled if, immediately prior to such event, he had
held the number of Shares obtainable upon the exercise of the Warrant. In any
such case, appropriate adjustment

                                       3

<PAGE>

will be made in the application of the provisions set forth herein with respect
to the rights and interest thereafter of the Warrantholder, to the end that the
provisions set forth herein will thereafter be applicable, as nearly as
reasonably may be, in relation to any shares of stock or other property
thereafter deliverable upon the exercise of the Warrant. The Company will not
permit any change in its capital structure to occur unless the issuer of the
shares of stock or other securities to be received by the holder of this
Warrant, if not the Company, agrees to be bound by and comply with the
provisions of this Warrant.

                  (c)      When any adjustment is required to be made in the
number of Shares or other securities or property purchasable upon exercise of
the Warrant, the Company will promptly determine the new number of such Shares
or other securities or property purchasable upon exercise of the Warrant and (i)
prepare and retain on file a statement describing in reasonable detail the
method used in arriving at the new number of such Shares or other securities or
property purchasable upon exercise of the Warrant and (ii) cause a copy of such
statement to be mailed to the Warrantholder within thirty (30) days after the
date of the event giving rise to the adjustment.

                  (d)      No fractional shares of Common Stock or other
securities will be issued in connection with the exercise of the Warrant, but
the Company will pay, in lieu of fractional shares, a cash payment therefor on
the basis of the mean between the bid and asked prices of the Common Stock in
the over-the-counter market or the closing price on a national securities
exchange on the day immediately prior to exercise.

                  (e)      If securities of the Company or securities of any
subsidiary of the Company are distributed pro rata to holders of Common Stock,
such number of such securities will be distributed to the Warrantholder or his
assignee upon exercise of this Warrant as the Warrantholder or assignee would
have been entitled to if the portion of the Warrant evidenced by this Warrant
certificate had been exercised prior to the record date for such distribution.
The provisions with respect to adjustment of the Common Stock provided in this
Section 4 will also apply to the securities to which the Warrantholder or his
assignee is entitled under this subsection 4(e).

                  (f)      In the event (i) the Company establishes a record
date to determine the holders of any class of securities who are entitled to
receive any dividend or other distribution or (ii) there occurs any change in
the Common Stock through merger, consolidation, reclassification,
reorganization, partial or complete liquidation, purchase of substantially all
of the assets of the Company or other change in the capital structure of the
Company, the Company shall give to the holder hereof a notice specifying (a) the
date of such record date for the purpose of such dividend or distribution and a
description of such dividend or distribution, (b) the date on which any such
merger, consolidation, reclassification, reorganization, sale, liquidation or
other change in the capital structure of the Company is expected to become
effective, and (c) the time, if any, that is to be fixed, as to when the holders
of record of Common Stock (or other securities) shall be entitled to exchange
their shares of Common Stock (or other securities) for securities or other
property deliverable upon such merger, consolidation, reclassification,
reorganization, sale, liquidation or other change in the capital structure of
the Company. Such written notice shall be given to the holder of this Warrant at
least twenty (20) days prior to the date specified in such notice on which any
such action is to be taken.

                                       4

<PAGE>

         5.       Reservation of Shares. The Company agrees that the number of
shares of Common Stock or other securities sufficient to provide for the
exercise of the Warrant upon the basis set forth above will at all times during
the term of the Warrant be reserved for exercise. If at any time the Company
does not have a sufficient number of shares of Common Stock or other securities
authorized to provide for the exercise of the Warrant, the Company shall take
such actions as may be reasonably necessary to increase the number of authorized
shares of Common Stock or other securities to provide for exercise of the
Warrant.

         6.       Validity of Shares. All Shares or other securities delivered
upon the exercise of the Warrant will be duly and validly issued in accordance
with their terms, and, in the case of capital stock, will, when issued and
delivered in accordance with their terms against payment therefor as provided in
the Warrant, be fully paid and nonassessable, and the Company will pay all
documentary and transfer taxes, if any, in respect of the original issuance
thereof upon exercise of the Warrant.

         7.       Restrictions on Transfer. This Warrant may not be sold,
transferred, assigned or hypothecated except as permitted pursuant to Section
2.6 of the Securities Purchase Agreement. The Warrant may be divided or
combined, upon request to the Company by the Warrantholder, into a certificate
or certificates evidencing the same aggregate number of Warrants.

         8.       No Rights as a Stockholder. Except as otherwise provided
herein, the Warrantholder will not, by virtue of ownership of the Warrant, be
entitled to any rights of a stockholder of the Company but will, upon written
request to the Company, be entitled to receive such quarterly or annual reports
as the Company distributes to its stockholders.

         9.       Notice. Any notices required or permitted to be given under
the terms of this Warrant must be sent by certified or registered mail (return
receipt requested) or delivered personally or by courier (including a recognized
overnight delivery service) or by facsimile and will be effective five (5) days
after being placed in the mail, if mailed by regular U.S. mail, or upon receipt,
if delivered personally, by courier (including a recognized overnight delivery
service) or by facsimile, in each case addressed to a party. The addresses for
such communications are:

         If to the Company:

                  Chief Financial Officer
                  Sonus Pharmaceuticals, Inc.
                  22026 20th Avenue S.E.
                  Bothell, Washington 98021
                  fax      (425) 489-0626

         If to a Warrantholder: to the address set forth immediately below the
Warrantholder's name on the signature pages hereto.

Each party will provide written notice to the other parties of any change in its
address.

                                       5

<PAGE>

         10.      Applicable Law. This Warrant will be governed by and construed
in accordance with the laws of the State of Delaware, without reference to
conflict of laws principles thereunder.

         11.      Entire Agreement. This Warrant, the exhibits and schedules
hereto, and the documents referred to herein, constitute the entire agreement
and understanding of the parties hereto with respect to the subject matter
hereof, and supersede all prior and contemporaneous agreements and
understandings, whether oral or written, between the parties hereto with respect
to the subject matter hereof.

         12.      Waiver; Consent. This Warrant may not be changed, amended,
terminated, augmented, rescinded or discharged (other than by performance), in
whole or in part, except by a writing executed by the parties hereto, and no
waiver of any of the provisions or conditions of this Warrant or any of the
rights of a party hereto shall be effective or binding unless such waiver shall
be in writing and signed by the party claimed to have given or consented
thereto.

         13.      No Impairment. The Company will not, by amendment of its
Charter or by any other voluntary action, avoid or seek to avoid the observance
or performance of any of the terms of this Warrant, but will at all times in
good faith assist in the carrying out of all such terms and in the taking of all
such action as may be necessary or appropriate in order to protect the rights of
the Warrantholder of this Warrant against impairment.

         14.      Remedies. The Company stipulates that the remedies at law of
the Warrantholder of this Warrant in the event of any default or threatened
default by the Company in the performance of or compliance with any of the terms
of this Warrant are not adequate and may be enforced by a decree for the
specific performance of any agreement contained herein or by an injunction
against a violation of any of the terms hereof or otherwise.

         15.      Severability. If one or more provisions of this Warrant are
held to be unenforceable under applicable law, such provision shall be excluded
from this Warrant and the balance of the Warrant shall be interpreted as if such
provision were so excluded and the balance shall be enforceable in accordance
with its terms.

                                       6

<PAGE>

         IN WITNESS WHEREOF, the parties hereto have executed this Warrant
effective as of the date set forth below.

         Dated as of July ___, 2003

         SONUS PHARMACEUTICALS, INC.

         By:  __________________________________
         Its: __________________________________

         Agreed and Accepted as of July ___, 2003

         [WARRANTHOLDER]

         By:  ___________________________________
         Its: ___________________________________

<PAGE>

                               NOTICE OF EXERCISE

To:      SONUS PHARMACEUTICALS, INC.

         The undersigned hereby elects to purchase ___________ shares of Common
Stock (the "Shares") of Sonus Pharmaceuticals, Inc., a Delaware corporation (the
"Company") pursuant to the terms of the attached Warrant, and tenders herewith
payment of the purchase price pursuant to the terms of the Warrant.

         Please issue certificates representing the Common Stock purchased
hereunder in the names and in the denominations indicated below.

         Please issue a new Warrant for the unexercised portion of the attached
Warrant, if any, in the name of the undersigned.

Dated:______________________________________     _______________________________

No. Warrant Shares:_________________________     Name:__________________________

Print Name of
Stockholder:________________________________     Title:_________________________

</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10.1
<SEQUENCE>4
<FILENAME>v92220exv10w1.txt
<DESCRIPTION>EXHIBIT 10.1
<TEXT>
<PAGE>

                                                                    Exhibit 10.1

                          SECURITIES PURCHASE AGREEMENT

         This SECURITIES PURCHASE AGREEMENT (this "Agreement"), dated as of July
25, 2003 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, together with their permitted transferees (each, an "Investor" and
collectively, the "Investors").

                                    RECITALS:

         A.       The Company and the Investors are executing and delivering
this Agreement in reliance upon the exemption from securities registration
afforded by Section 4(2) of the Securities Act and Rule 506 under Regulation D.

         B.       The Investors desire, upon the terms and conditions stated in
this Agreement, to purchase shares of the Company's Common Stock (the "Common
Shares") and warrants, in the form of Exhibit A hereto, to purchase such number
of shares of the Company's Common Stock equal to 50% of the Common Shares
purchased by the Investors, rounded down to the nearest whole share (the
"Warrants," and collectively with the Common Shares, the "Securities"), for an
aggregate purchase price of at least Ten Million Dollars ($10,000,000) and not
to exceed Twenty Million Dollars ($20,000,000). The purchase price per share of
the Common Shares is $3.56, which is equal to the lesser of (i) average per
share closing prices as reported on Nasdaq for the five (5) trading days ending
on the day prior to the date of this Agreement or (ii) the per share closing
price as reported on Nasdaq on the trading day immediately preceding the date of
this Agreement. The purchase price for each Warrant is $.125 multiplied by the
number of Shares of Common Stock purchasable under each Warrant (the "Warrant
Shares").

         C.       Contemporaneously with the execution and delivery of this
Agreement, the parties hereto are executing and delivering a Registration Rights
Agreement under which the Company has agreed to provide certain registration
rights under the Securities Act, the rules and regulations promulgated
thereunder and applicable state securities laws.

         D.       The capitalized terms used herein and not otherwise defined
have the meanings given them in Article IX hereof.

         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 Investors hereby agree as
follows:

                                    ARTICLE I
                         PURCHASE AND SALE OF SECURITIES

         1.1      Purchase and Sale of Securities. At the Closing, subject to
the terms of this Agreement and the satisfaction or waiver of the conditions set
forth in Articles VI and VII hereof, the Company will issue and sell to each
Investor, and each Investor will (on a several and not a joint basis) purchase
from the Company, the number of Securities set forth beneath such Investor's
name on the signature pages hereof.

<PAGE>

         1.2      Payment. At or prior to the Closing, each Investor will pay
the purchase price for the number of Securities set forth beneath its name on
the signature pages hereof, by wire transfer of immediately available funds in
accordance with the wire instructions set forth on Exhibit B hereto. Such funds
shall be held, without interest, by the Company's legal counsel in trust for the
benefit of each such Investor until the Closing Date and such time as the
Company or the Company's legal counsel receives written confirmation from each
Investor (which may be transmitted by facsimile or email) that all closing
conditions have been satisfied, at which time such funds shall be immediately
forwarded by wire transfer to the Company. The Company shall deliver to each
Investor certificates representing the Securities so purchased by such Investor
within two (2) business days following the Closing Date against delivery of the
purchase price as described above.

         1.3      Closing Date. Subject to the satisfaction or waiver of the
conditions set forth in Articles VI and VII hereof, the Closing will take place
at 8 a.m. Pacific Standard Time on July 25, 2003 or at such other date or time
agreed upon by the parties to this Agreement (the "Closing Date"). The Closing
will be held at the offices of Stradling Yocca Carlson & Rauth or at such other
place as the parties agree. In no event (i) will the Closing occur unless and
until the Company's legal counsel has received deposits for the purchase of
Securities in accordance with Section 1.2 of at least Ten Million Dollars
($10,000,000) or (ii) will the Company sell Securities pursuant to this
Agreement for an aggregate purchase price in excess of Twenty Million Dollars
($20,000,000).

                                   ARTICLE II
                    INVESTOR'S REPRESENTATIONS AND WARRANTIES

         Each Investor represents and warrants to the Company, severally and
solely with respect to itself and its purchase hereunder and not with respect to
any other Investor, that:

         2.1      Investment Purpose. The Investor is purchasing the Securities
for its own account and not with a present view toward the public sale or
distribution thereof, except pursuant to sales registered or exempted from
registration under the Securities Act; provided, however, that by making the
representation herein, the Investor does not agree to hold any of the Securities
for any minimum or other specific term and reserves the right to dispose of the
Securities at any time in accordance with or pursuant to a registration
statement or an exemption from registration under the Securities Act.

         2.2      Accredited Investor Status. The Investor is an "accredited
investor" as defined in Rule 501(a) of Regulation D. The Investor has delivered
an Investor Questionnaire in the form of Exhibit C to the Company and to Punk,
Ziegel & Company.

         2.3      Reliance on Exemptions. The Investor understands that the
Securities are being offered and sold to it in reliance upon specific exemptions
from the registration requirements of United States federal and state securities
laws and that the Company is relying upon the truth and accuracy of, and the
Investor's compliance with, the representations, warranties, agreements,
acknowledgments and understandings of the Investor set forth herein in order to
determine the availability of such exemptions and the eligibility of the
Investor to acquire the Securities.

         2.4      Information. The Investor has received and read the
Confidential Offering Memorandum, dated July 21, 2003, as the same has been
amended or supplemented, including the Exhibits A, B and C thereto (Exhibit A,
being the Company's 10-Q for the period ended March 31,

                                      2

<PAGE>

2003; Exhibit B, the Company's 10-K for the period ended December 31, 2002; and
Exhibit C, the Company's Proxy Statement filed on March 2, 2003) (the "Offering
Memorandum"). The Investor and its advisors, if any, have been furnished with
all materials relating to the business, finances and operations of the Company,
and materials relating to the offer and sale of the Securities, that have been
requested by the Investor or its advisors, if any. The Investor and its
advisors, if any, have been afforded the opportunity to ask questions of the
Company. Neither such inquiries nor any other due diligence investigation
conducted by Investor or any of its advisors or representatives modify, amend or
affect the Investor's right to rely on the Company's representations and
warranties contained in Article III below. The Investor acknowledges and
understands that its investment in the Securities involves a significant degree
of risk, including the risks reflected in the Offering Memorandum.

         2.5      Governmental Review. The Investor understands that no United
States federal or state agency or any other government or governmental agency
has passed upon or made any recommendation or endorsement of the Securities or
an investment therein.

         2.6      Transfer or Resale. The Investor understands that:

         (a)      except as provided in the Registration Rights Agreement, the
Securities have not been and are not being registered under the Securities Act
or any applicable state securities laws and, consequently, the Investor may have
to bear the risk of owning the Securities for an indefinite period of time
because the Securities may not be transferred unless (i) the resale of the
Securities is registered pursuant to an effective registration statement under
the Securities Act; (ii) the Investor has delivered to the Company an opinion of
counsel (in form, substance and scope customary for opinions of counsel in
comparable transactions) to the effect that the Securities to be sold or
transferred may be sold or transferred pursuant to an exemption from such
registration; (iii) the Securities are sold or transferred pursuant to Rule 144;
or (iv) the Securities are sold or transferred to an affiliate (as defined in
Rule 144) of the Investor;

         (b)      any sale of the Securities made in reliance on Rule 144 may be
made only in accordance with the terms of Rule 144 and, if Rule 144 is not
applicable, any resale of the Securities under circumstances in which the seller
(or the person through whom the sale is made) may be deemed to be an underwriter
(as that term is defined in the Securities Act) may require compliance with some
other exemption under the Securities Act or the rules and regulations of the SEC
thereunder; and

         (c)      except as set forth in the Registration Rights Agreement,
neither the Company nor any other person is under any obligation to register the
Securities under the Securities Act or any state securities laws or to comply
with the terms and conditions of any exemption thereunder.

         2.7      Legends. The Investor understands that until (a) the
Securities may be sold by the Investor under Rule 144(k) or (b) such time as the
resale of the Securities has been registered under the Securities Act as
contemplated by the Registration Rights Agreement, the certificates representing
the Securities will bear a restrictive legend in substantially the following
form (and a stop-transfer order may be placed against transfer of the
certificates for such Securities):

         THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED
         UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR THE SECURITIES LAWS OF
         ANY STATE OF THE UNITED STATES. THE

                                       3

<PAGE>

         SECURITIES MAY NOT BE SOLD, TRANSFERRED OR ASSIGNED IN THE ABSENCE OF
         AN EFFECTIVE REGISTRATION STATEMENT FOR THE SECURITIES UNDER APPLICABLE
         SECURITIES LAWS, OR UNLESS OFFERED, SOLD OR TRANSFERRED PURSUANT TO AN
         AVAILABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THOSE LAWS.

         The legend set forth above will be removed and the Company will issue a
certificate without the legend to the holder of any certificate upon which it is
stamped, in accordance with the terms of Article V hereof.

         2.8      Authorization; Enforcement. This Agreement and the
Registration Rights Agreement have been duly and validly authorized, executed
and delivered on behalf of the Investor and are valid and binding agreements of
the Investor enforceable in accordance with their terms, subject to the effect
of any applicable bankruptcy, insolvency, reorganization, moratorium or similar
laws affecting the rights of creditors generally and the application of general
principles of equity.

         2.9      Residency. The Investor is a resident of (or, if an entity,
has its principal place of business in) the jurisdiction set forth immediately
below such Investor's name on the signature pages hereto.

         2.10     Acknowledgements Regarding Placement Agent. The Investor
acknowledges that Punk, Ziegel & Company is acting as placement agent (the
"Placement Agent") for the Securities being offered hereby and will be
compensated by the Company for acting in such capacity. The Investor further
acknowledges that the Placement Agent has acted solely as placement agent in
connection with the offering of the Securities by the Company, that the
information and data provided to the Investor in connection with the
transactions contemplated hereby have not been subjected to independent
verification by the Placement Agent, and that the Placement Agent makes no
representation or warranty with respect to the accuracy or completeness of such
information, data or other related disclosure material. The Investor further
acknowledges that in making its decision to enter into this Agreement and
purchase the Securities it has relied on its own examination of the Company and
the terms of, and consequences, of holding the Securities. The Investor further
acknowledges that the provisions of this Section 2.10 are for the benefit of,
and may be enforced by, the Placement Agent.

                                  ARTICLE III
                  REPRESENTATIONS AND WARRANTIES OF THE COMPANY

         The Company represents and warrants to the Investors that:

         3.1      Organization and Qualification. The Company is duly
incorporated, validly existing and in good standing under the laws of the
jurisdiction in which it is incorporated, with full power and authority
(corporate and other) to own, lease, use and operate its properties and to carry
on its business as and where now owned, leased, used, operated and conducted.
The Company is duly qualified to do business and is in good standing in every
jurisdiction in which the nature of the business conducted by it makes such
qualification necessary, except where the failure to be so qualified or in good
standing would not have a Material Adverse Effect.

                                       4

<PAGE>

         3.2      Authorization; Enforcement. (a) The Company has all requisite
corporate power and authority to enter into and to perform its obligations under
this Agreement, the Registration Rights Agreement and the Warrants, to
consummate the transactions contemplated hereby and thereby and to issue the
Securities in accordance with the terms hereof and thereof; (b) the execution,
delivery and performance of this Agreement, the Registration Rights Agreement
and the Warrants by the Company and the consummation by it of the transactions
contemplated hereby and thereby (including without limitation the issuance of
the Securities) have been duly authorized by the Company's Board of Directors
and no further consent or authorization of the Company, its Board or Directors,
or its shareholders is required; (c) this Agreement, the Registration Rights
Agreement and the Warrants have been duly executed by the Company; and (d) each
of this Agreement, the Registration Rights Agreement and the Warrants
constitutes a legal, valid and binding obligation of the Company enforceable
against the Company in accordance with its terms, subject to the effect of any
applicable bankruptcy, insolvency, reorganization, or moratorium or similar laws
affecting the rights of creditors generally and the application of general
principles of equity.

         3.3      Capitalization. As of the date hereof, the authorized capital
stock of the Company consists of (a) 30,000,000 shares of Common Stock, par
value $.001 per share, of which 13,749,237 shares are issued and outstanding,
2,095,647 shares are reserved for issuance upon exercise of stock options
outstanding under the Company's employee and director stock option plans,
907,164 shares are reserved for grants of rights to purchase under the Company's
employee and director stock option plans, 19,297 shares are reserved for
issuance pursuant to the Company's employee stock purchase plan and 516,675
shares are reserved for issuance under warrants issued by the Company on June
15, 2001 and January 18, 2002; (b) 5,000,000 shares of preferred stock, par
value $.001 per share, 500,000 of which shares are designated Series A Junior
Participating Preferred Stock, par value $.001 per share, none of which is
issued and outstanding. All of such outstanding shares of capital stock are, or
upon issuance will be, duly authorized, validly issued, fully paid and
nonassessable. No shares of capital stock of the Company, including the
Securities issuable pursuant to this Agreement, are subject to preemptive rights
or any other similar rights of the stockholders of the Company or any liens or
encumbrances imposed through the actions or failure to act of the Company.
Except as disclosed in this Section 3.3 and except for the transactions
contemplated hereby, (i) there are no outstanding options, warrants, scrip,
rights to subscribe for, puts, calls, rights of first refusal or preemptive or
other similar rights, agreements, understandings, claims or other commitments or
rights of any character whatsoever relating to, or securities or rights directly
or indirectly convertible into, exercisable for, or exchangeable for any shares
of capital stock of the Company, or arrangements by which the Company is or may
become bound to issue additional shares of capital stock of the Company; (ii)
there are no agreements or arrangements (other than the Registration Rights
Agreement, the Registration Rights Agreements entered into on June 15, 2001 and
January 18, 2002 and the Purchase Warrants dated June 15, 2001) under which the
Company is obligated to register the sale of any of its securities under the
Securities Act and (iii) there are no anti-dilution or price adjustment
provisions contained in any security issued by the Company (or in any agreement
providing rights to security holders) that will be triggered by the issuance of
the Securities (other than the exercise price adjustments pursuant to the
warrants to purchase an aggregate of 385,800 shares of Common Stock, issued by
the Company on January 18, 2002). The Company has furnished to the Investors
true and correct copies of the Company's Certificate of Incorporation, as
amended, as in effect on the date hereof, the Company's Bylaws as in effect on
the date hereof and the terms of all securities convertible into or exercisable
for Common Stock of the Company and the material rights of the holders thereof
in respect thereto.

                                       5

<PAGE>

         3.4      Issuance of Securities. The Securities are duly authorized
and, upon issuance in accordance with the terms of this Agreement, will be
validly issued, fully paid and non-assessable, free from all taxes, liens,
claims, encumbrances and charges with respect to the issue thereof, will not be
subject to preemptive rights or other similar rights of stockholders of the
Company, and will not impose personal liability on the holders thereof. The
Company has reserved a sufficient number of shares of Common Stock for issuance
upon exercise of the Warrants, and upon payment of the exercise price and
exercise of the Warrants in accordance with its terms, the Warrant Shares will
be validly issued, fully paid and non-assessable, free from all taxes, liens,
claims, encumbrances and charges with respect to the issue thereof, will not be
subject to preemptive rights or other similar rights of stockholders of the
Company and will not impose personal liability on the holders thereof.

         3.5      No Conflicts; No Violation.

                  (a)      The execution, delivery and performance of this
Agreement, the Registration Rights Agreement and the Warrants by the Company and
the consummation by the Company of the transactions contemplated hereby and
thereby (including, without limitation, the issuance of the Securities) will not
(i) conflict with or result in a violation of any provision of its Certificate
of Incorporation or Bylaws or (ii) violate or conflict with, or result in a
breach of any provision of, or constitute a default (or an event which with
notice or lapse of time or both could become a default) under, or give to others
any rights of termination, amendment (including without limitation, the
triggering of any anti-dilution provision), acceleration or cancellation of, any
agreement, indenture, patent, patent license, or instrument to which the Company
is a party, or (iii) result in a violation of any law, rule, regulation, order,
judgment or decree (including U.S. federal and state securities laws and
regulations and regulations of any self-regulatory organizations to which the
Company or its securities are subject) applicable to the Company or by which any
property or asset of the Company is bound or affected (except for such
conflicts, breaches, defaults, terminations, amendments, accelerations,
cancellations and violations as would not, individually or in the aggregate,
have a Material Adverse Effect).

                  (b)      The Company is not in violation of its Certificate of
Incorporation, Bylaws or other organizational documents and the Company is not
in default (and no event has occurred which with notice or lapse of time or both
could put the Company in default) under any agreement, indenture or instrument
to which the Company is a party or by which any property or assets of the
Company is bound or affected, except for possible defaults as would not,
individually or in the aggregate, have a Material Adverse Effect.

                  (c)      The Company is not conducting its business in
violation of any law, ordinance or regulation of any governmental entity, the
failure to comply with which would, individually or in the aggregate, have a
Material Adverse Effect.

                  (d)      Except as specifically contemplated by this Agreement
and as required under the Securities Act and any applicable state securities
laws or any listing agreement with any securities exchange or automated
quotation system, the Company is not required to obtain any consent,
authorization or order of, or make any filing or registration with, any court or
governmental agency or any regulatory or self regulatory agency in order for it
to execute, deliver or perform any of its obligations under this Agreement, the
Registration Rights Agreement or the Warrants, in each case in accordance with
the terms hereof or thereof, or to issue and sell the Securities in accordance
with the terms hereof. All consents, authorizations, orders, filings and
registrations which the

                                       6

<PAGE>

Company is required to obtain pursuant to the preceding sentence have been
obtained or effected on or prior to the date hereof. The Company is not in
violation of the listing requirements of Nasdaq.

         3.6      SEC Documents, Financial Statements. Since June 30, 2000, the
Company has timely filed all reports, schedules, forms, statements and other
documents required to be filed by it with the SEC pursuant to the reporting
requirements of the Exchange Act (all of the foregoing filed prior to the date
hereof and all exhibits included therein and financial statements and schedules
thereto and documents (other than exhibits) incorporated by reference therein,
being hereinafter referred to herein as the "SEC Documents"). The Company has
delivered to each Investor, or each Investor has had access to, true and
complete copies of the SEC Documents, except for such exhibits and incorporated
documents. As of their respective dates, the SEC Documents complied in all
material respects with the requirements of the Exchange Act or the Securities
Act, as the case may be, and the rules and regulations of the SEC promulgated
thereunder applicable to the SEC Documents, and none of the SEC Documents, at
the time they were filed with the SEC, contained any untrue statement of a
material fact or omitted to state a material fact required to be stated therein
or necessary in order to make the statements therein, in light of the
circumstances under which they were made, not misleading. The Offering
Memorandum does not contain any untrue statement of a material fact or omit to
state a material fact required to be stated therein, or necessary in order to
make the statements therein, in light of the circumstances under which they were
made, not misleading. As of their respective dates, the financial statements of
the Company included in the Offering Memorandum complied as to form in all
material respects with applicable accounting requirements and the published
rules and regulations of the SEC with respect thereto. Such financial statements
have been prepared in accordance with U.S. generally accepted accounting
principles, consistently applied, during the periods involved (except (i) as may
be otherwise indicated in such financial statements or the notes thereto, or
(ii) in the case of unaudited interim statements, to the extent they may not
include footnotes or may be condensed or summary statements) and fairly present
in all material respects the financial position of the Company as of the dates
thereof and the results of its operations and cash flows for the periods then
ended (subject, in the case of unaudited statements, to normal year-end audit
adjustments). Except as set forth in the financial statements included in the
Offering Memorandum, the Company has no liabilities, contingent or otherwise,
other than liabilities incurred in the ordinary course of business subsequent to
March 31, 2003, and liabilities of the type not required under generally
accepted accounting principles to be reflected in such financial statements.
Such liabilities incurred subsequent to March 31, 2003, are not, in the
aggregate, material to the financial condition or operating results of the
Company.

         3.7      Absence of Certain Changes. Except as disclosed in the
Offering Memorandum, since December 31, 2002, there has been no material adverse
change in the assets, liabilities, business, properties, operations, financial
condition, prospects or results of operations of the Company, and the Company
has not (i) varied its business plan or practices, in any material respect, from
past practices, (ii) entered into any material financing, joint venture, license
or similar arrangements or (iii) suffered or permitted to be incurred any
liability or obligation against any of its properties or assets that would limit
or restrict its ability to perform its obligations hereunder.

         3.8      Absence of Litigation. Except as disclosed in the SEC
Documents, there is no action, suit, claim, proceeding, inquiry or investigation
before or by any court, public board, government agency, self-regulatory
organization or body pending or, to the knowledge of the Company, threatened
against or affecting the Company or any of its officers or directors acting as
such that could, individually or in the aggregate, have a Material Adverse
Effect.

                                       7

<PAGE>

         3.9      Intellectual Property Rights. The Company owns or possesses
the licenses or rights to use all patents, patent applications, patent rights,
inventions, know-how, trade secrets, trademarks, trademark applications, service
marks, service names, trade names and copyrights necessary to enable it to
conduct its business as now operated or as currently proposed to be operated
(the "Intellectual Property"). Except as set forth in the SEC Documents, there
are no material outstanding options, licenses or agreements relating to the
Intellectual Property, nor is the Company bound by or a party to any material
options, licenses or agreements relating to the patents, patent applications,
patent rights, inventions, know-how, trade secrets, trademarks, trademark
applications, service marks, service names, trade names or copyrights of any
other person or entity. Except as disclosed in the SEC Documents, there is no
claim or action or proceeding pending or, to the Company's knowledge, threatened
that challenges the right of the Company with respect to any Intellectual
Property. Except as set forth in the SEC Documents, to the knowledge of the
Company, the Company's Intellectual Property does not infringe any intellectual
property rights of any other person which, if the subject of an unfavorable
decision, ruling or finding would have a Material Adverse Effect.

         3.10     Tax Status. The Company has timely made or filed all federal,
state and foreign income and all other tax returns, reports and declarations
required by any jurisdiction to which it is subject (unless and only to the
extent that the Company has set aside on its books provisions reasonably
adequate for the payment of all unpaid and unreported taxes) and has timely paid
all taxes and other governmental assessments and charges, shown or determined to
be due on such returns, reports and declarations, except those being contested
in good faith, and has set aside on its books provisions reasonably adequate for
the payment of all taxes for periods subsequent to the periods to which such
returns, reports or declarations apply. To the knowledge of the Company, there
are no unpaid taxes claimed to be due by the taxing authority of any
jurisdiction, and the officers of the Company know of no basis for any such
claim. The Company has not executed a waiver with respect to the statute of
limitations relating to the assessment or collection of any foreign, federal,
state or local tax. None of the Company's tax returns is presently being audited
by any taxing authority.

         3.11     Environmental Laws. The Company (i) is in compliance with all
applicable foreign federal, state and local laws and regulations relating to the
protection of human health and safety, the environment or hazardous or toxic
substances or wastes, pollutants or contaminants ("Environmental Laws"), (ii)
has received all permits, licenses or other approvals required of them under
applicable Environmental Laws to conduct its business and (iii) is in compliance
with all terms and conditions of any such permit, license or approval where, in
each of the three foregoing clauses, the failure to so comply would have,
individually or in the aggregate, a Material Adverse Effect.

         3.12     No Integrated Offering. Neither the Company, nor any of its
affiliates, nor any person acting on its or their behalf, has directly or
indirectly made any offers or sales in any security or solicited any offers to
buy any security under circumstances that would require registration under the
Securities Act of the issuance of the Securities to the Investors. The issuance
of the Securities to the Investors will not be integrated with any other
issuance of the Company's securities (past, current or future) for purposes of
the Securities Act or any applicable rules of Nasdaq.

         3.13     No Brokers. The Company has taken no action which would give
rise to any claim by any person for brokerage commissions, finder's fees or
similar payments relating to this Agreement or the transactions contemplated
hereby, except for dealings with Punk, Ziegel & Company, whose commissions and
fees will be paid for by the Company.

                                       8

<PAGE>

         3.14     Insurance. The Company is insured by insurers of recognized
financial responsibility against such losses and risks and in such amounts as
management of the Company believes to be prudent and customary in the businesses
in which the Company is engaged.

         3.15     Employment Matters. The Company is in compliance with all
federal, state, local and foreign laws and regulations respecting employment and
employment practices, terms and conditions of employment and wages and hours,
except where failure to be in compliance would not have a Material Adverse
Effect. The Company is not bound by or subject to (and none of its assets or
properties is bound by or subject to) any written or oral, express or implied,
contract, commitment or arrangement with any labor union, and no labor union has
requested or, to the Company's knowledge, has sought to represent any of the
employees, representatives or agents of the Company. There is no strike or other
labor dispute involving the Company pending, or to the Company's knowledge,
threatened nor is the Company aware of any labor organization activity involving
its employees. The Company is not aware that any officer or key employee, or
that any group of officers or key employees, intends to terminate their
employment with the Company, nor does the Company have a present intention to
terminate the employment of any of the foregoing.

         3.16     Employee Benefit Plans. Except as set forth in the Offering
Memorandum, the Company does not have any Employee Benefit Plans, as such term
is defined in the Employee Retirement Security Act of 1974.

         3.17     Investment Company Status. The Company is not and upon
consummation of the sale of the Securities will not be an "investment company,"
a company controlled by an "investment company" or an "affiliated person" of, or
"promoter" or "principal underwriter" for, an "investment company" as such terms
are defined in the Investment Company Act of 1940, as amended.

         3.18     No Subsidiaries. The Company does not presently own or
control, directly or indirectly, any interest in any other corporation,
association, joint venture, partnership or other business entity and the Company
is not a direct or indirect participant in any joint venture or partnership.

         3.19     No Conflict of Interest. The Company is not indebted, directly
or indirectly, to any of its officers or directors or to their respective
spouses or children, in any amount whatsoever other than in connection with
expenses or advances of expenses incurred in the ordinary course of business or
relocation expenses of employees. None of the Company's officers, directors or
employees, or any members of their immediate families, are directly, or
indirectly, indebted to the Company or, to the best of the Company's knowledge,
have any direct or indirect ownership interest in any entity with which the
Company is affiliated or with which the Company has a business relationship, or
any entity which competes with the Company, except that officers, directors,
employees and/or stockholders of the Company may own stock in (but not exceeding
five percent (5%) of the outstanding capital stock of) any publicly traded
company that may compete with the Company. To the best of the Company's
knowledge, none of the Company's officers, directors or employees or any members
of their immediate families are, directly or indirectly, interested in any
material contract with the Company. The Company is not a guarantor or indemnitor
of any indebtedness of any other person or entity.

         3.20     Nasdaq Notification. The Company has notified Nasdaq of the
issuance and listing of the Common Shares and Warrant Shares on Nasdaq and the
Common Shares and Warrant Shares

                                       9

<PAGE>

have been approved for quotation on Nasdaq, upon official notice of issuance.

         3.21     Reporting Status; Eligibility to Use Form S-3. The Company's
Common Stock is registered under Section 12g of the Exchange Act. The Company
currently meets the "registrant eligibility" requirements set forth in the
general instructions to Form S-3 to enable the registration of the Registrable
Securities, as defined in the Registration Rights Agreement.

         3.22     No Manipulation of Stock. The Company has not taken and will
not, in violation of applicable law, take, any action designed to or that might
reasonably be expected to cause or result in stabilization or manipulation of
the price of the Common Stock to facilitate the sale or resale of the Common
Shares.

         3.23     Representations Complete. The representations and warranties
made by the Company in this Agreement, the statements made in any certificates
furnished by the Company pursuant to this Agreement, and the statements made by
the Company in any documents mailed, delivered or furnished to the Investors in
connection with this Agreement, taken as a whole, do not contain and will not
contain, as of their respective dates and as of the Closing Date, any untrue
statement of a material fact, nor do they omit or will they omit, as of their
respective dates or as of the Closing Date, to state any material fact necessary
in order to make the statements contained herein or therein, in the light of the
circumstances under which they were made, not misleading.

                                    ARTICLE IV
                                    COVENANTS

         4.1      Best Efforts. Each party will use its best efforts to satisfy
in a timely fashion each of the conditions to be satisfied by it under Articles
VI and VII of this Agreement.

         4.2      Form D; Blue Sky Laws. The Company will timely file a Notice
of Sale of Securities on Form D with respect to the Securities, as required
under Regulation D. The Company will, on or before the Closing Date, take such
action as it reasonably determines to be necessary to qualify the Securities for
sale to the Investors under this Agreement under applicable securities (or "blue
sky") laws of the states of the United States (or to obtain an exemption from
such qualification).

         4.3      Continued Eligibility to Use Form S-3. Throughout the
Registration Period (as defined in the Registration Rights Agreement), the
Company will timely file all reports, schedules, forms, statements and other
documents required to be filed by it with the SEC under the reporting
requirements of the Exchange Act, and the Company will not terminate its status
as an issuer required to file reports under the Exchange Act even if the
Exchange Act or the rules and regulations thereunder would permit such
termination. The Company will take all reasonably necessary action to continue
to meet, the "registrant eligibility" requirements set forth in the general
instructions to Form S-3 to enable the registration of the Registrable
Securities as defined in the Registration Rights Agreement.

         4.4      Expenses. The Company and each Investor is liable for, and
will pay, its own expenses incurred in connection with the negotiation,
preparation, execution and delivery of this Agreement and the other agreements
to be executed in connection herewith, including, without

                                       10

<PAGE>

limitation, attorneys' and consultants' fees and expenses; provided, that if the
transactions contemplated hereby are consummated, the Company will pay the fees
and expenses of one special counsel to the Investors, not to exceed $15,000.

         4.5      Financial Information. As long as an Investor owns any of the
Securities or Warrant Shares, the financial statements of the Company will be
prepared in accordance with United States generally accepted accounting
principles, consistently applied, and will fairly present in all material
respects the consolidated financial position of the Company and results of its
operations and cash flows as of, and for the periods covered by, such financial
statements (subject, in the case of unaudited statements, to normal year-end
audit adjustments).

         4.6      Compliance with Law. As long as an Investor owns any of the
Securities or Warrant Shares, the Company will conduct its business in
compliance with all applicable laws, rules and regulations of the jurisdictions
in which it is conducting business, including, without limitation, all
applicable local, state and federal environmental laws and regulations, the
failure to comply, individually or in the aggregate, with which would have a
Material Adverse Effect.

         4.7      No Integration. The Company will not make any offers or sales
of any security or solicit offers to buy or otherwise negotiate in respect of
any offer or sale of any security (other than the Securities) under
circumstances that would cause the offering of the Securities to be integrated
with any other offering of securities by the Company (i) for the purpose of any
stockholder approval provision applicable to the Company or its securities or
(ii) for purposes of any registration requirement under the Securities Act.

         4.8      Sales by Investors. Each Investor will sell any Securities
sold by it in compliance with applicable prospectus delivery requirements, if
any, or otherwise in compliance with the requirements for an exemption from
registration under the Securities Act and the rules and regulations promulgated
thereunder. No Investor will make any sale, transfer or other disposition of the
Securities in violation of federal or state securities laws.

                                   ARTICLE V
                 TRANSFER AGENT INSTRUCTIONS; REMOVAL OF LEGENDS

         5.1      Issuance of Certificates. The Company will, or will instruct
its transfer agent to, issue certificates, registered in the name of each
Investor or its nominee, for the Securities and, promptly upon exercise of any
Warrants, the applicable Warrant Shares. All such certificates will bear the
restrictive legend described in Section 2.7, except as otherwise specified in
this Article V. The Company will not give to its transfer agent any instruction
other than as described in this Article V and stop transfer instructions to give
effect to Section 2.7 hereof (prior to registration of the Securities under the
Securities Act). Nothing in this Section will affect in any way the Investor's
obligations to comply with all applicable prospectus delivery requirements, if
any, upon resale of the Common Shares and/or Warrant Shares.

         5.2      Unrestricted Securities. If, unless otherwise required by
applicable state securities laws, (a) the Securities or Warrant Shares
represented by a certificate have been registered under an effective
registration statement filed under the Securities Act, (b) a holder of
Securities or Warrant Shares provides the Company and its transfer agent with an
opinion of counsel, in form, substance and scope customary for opinions of
counsel in comparable transactions, to the effect that a public

                                       11

<PAGE>

sale or transfer of such Securities or Warrant Shares may be made without
registration under the Securities Act and such sale either has occurred or may
occur without restriction on the manner of such sale or transfer, (c) such
holder provides the Company and its transfer agent with reasonable assurances
that such Securities or Warrant Shares can be sold under Rule 144, or (d) the
Securities or Warrant Shares represented by a certificate can be sold without
restriction as to the number of securities sold under Rule 144(k), the Company
will permit the transfer of the Securities or Warrant Shares, and the Company's
transfer agent will issue one or more certificates, free from any restrictive
legend, in such name and in such denominations as specified by such holder.
Notwithstanding anything herein to the contrary, the Securities or Warrant
Shares may be pledged as collateral in connection with a bona fide margin
account or other lending arrangement; provided that such pledge will not alter
the provisions of this Article V with respect to the removal of restrictive
legends.

         5.3      Enforcement of Provision. The Company acknowledges that a
breach by it of its obligations hereunder will cause irreparable harm to the
Investor by vitiating the intent and purpose of the transaction contemplated
hereby. Accordingly, the Company acknowledges that the remedy at law for a
breach of its obligations under this Article V will be inadequate and agrees, in
the event of a breach or threatened breach by the Company of the provisions of
this Section, that the Investor will be entitled, in addition to all other
available remedies, to an injunction restraining any breach and requiring
immediate transfer of the Securities and/or Warrant Shares, as applicable,
without the necessity of showing economic loss and without any bond or other
security being required.

                                   ARTICLE VI
                 CONDITIONS TO THE COMPANY'S OBLIGATION TO SELL

         The obligation of the Company to issue and sell the Securities to each
Investor at the Closing is subject to the satisfaction by such Investor, on or
before the Closing Date, of each of the following conditions. These conditions
are for the Company's sole benefit and may be waived by the Company at any time
in its sole discretion:

         6.1      The Investor will have executed this Agreement, the Investor
Questionnaire and the Registration Rights Agreement and will have delivered
those agreements to the Company.

         6.2      The Investor will have delivered the purchase price for the
Securities to the Company in accordance with this Agreement.

         6.3      The representations and warranties of the Investor must be
true and correct in all material respects as of the Closing Date as though made
at that time (except for representations and warranties that speak as of a
specific date, which representations and warranties must be correct as of such
date), and the Investor will have performed and complied in all material
respects with the covenants and conditions required by this Agreement to be
performed or complied with by the Investor at or prior to the Closing.

         6.4      No statute, rule, regulation, executive order, decree, ruling
or injunction will have been enacted, entered, promulgated or endorsed by or in
any court or governmental authority of competent jurisdiction or any
self-regulatory organization having authority over the matters contemplated
hereby which prohibits the consummation of any of the transactions contemplated
by this Agreement or the Registration Rights Agreement or the Warrants.

                                       12

<PAGE>

                                  ARTICLE VII
               CONDITIONS TO THE INVESTOR'S OBLIGATION TO PURCHASE

         The obligation of each Investor hereunder to purchase the Securities
from the Company at the Closing is subject to the satisfaction, on or before the
Closing Date, of each of the following conditions. These conditions are for each
Investor's respective benefit and may be waived by any Investor at any time in
its sole discretion:

         7.1      The Company will have executed this Agreement, the
Registration Rights Agreement and the Warrants and will have delivered those
Agreements to the Investor.

         7.2      The Investors shall have received an opinion of counsel from
Stradling Yocca Carlson & Rauth, counsel to the Company, in customary form,
acceptable to Investors and their counsel.

         7.3      Each of the representations and warranties of the Company
qualified by materiality must be true and correct in all respects as of the
Closing as though made at that time (except for representations and warranties
that speak as of a specific date, which representations and warranties must be
true and correct as of such date) and each of the representations and warranties
of the Company not qualified by materiality must be true and correct in all
material respects as of the Closing as though made at that time (except for
representations and warranties that speak as of a specific date, which
representations and warranties must be true and correct as of such date) and the
Company must have performed and complied in all material respects with the
covenants and conditions required by this Agreement to be performed or complied
with by the Company at or prior to the Closing. The Investor must have received
a certificate or certificates dated as of the Closing Date and executed by the
Chief Executive Officer or the Chief Financial Officer of the Company certifying
as to the matters in contained in this Section 7.3 and as to such other matters
as may be reasonably requested by such Investor, including, but not limited to,
the Company's Certificate of Incorporation, Bylaws, Board of Directors'
resolutions relating to the transactions contemplated hereby and the incumbency
and signatures of each of the officers of the Company who may execute on behalf
of the Company any document delivered at the Closing.

         7.4      No litigation, statute, rule, regulation, executive order,
decree, ruling or injunction will have been enacted, entered, promulgated or
endorsed by or in any court or governmental authority of competent jurisdiction
or any self-regulatory organization having authority over the matters
contemplated hereby which prohibits the consummation of any of the transactions
contemplated by this Agreement or the Registration Rights Agreement or the
Warrants and which could, individually or in the aggregate, have a Material
Adverse Effect.

         7.5      Trading and listing of the Common Stock on Nasdaq must not
have been suspended by the SEC or Nasdaq.

         7.6      Irrevocable transfer agent instructions, in form and substance
satisfactory to the Investors, will have been delivered to the Company's
transfer agent and acknowledged in writing by such transfer agent.

                                       13

<PAGE>

                                  ARTICLE VIII
                                 INDEMNIFICATION

         In consideration of each Investor's execution and delivery of this
Agreement and its acquisition of the Securities hereunder, and in addition to
all of the Company's other obligations under this Agreement and the Registration
Rights Agreement and the Warrants, the Company will defend, protect, indemnify
and hold harmless each Investor and each other holder of the Securities and all
of their stockholders, officers, directors, employees and direct or indirect
investors and any of the foregoing person's agents or other representatives
(including, without limitation, those retained in connection with the
transactions contemplated by this Agreement) (collectively, the "Indemnitees")
from and against any and all actions, causes of action, suits, claims, losses,
costs, penalties, fees, liabilities and damages, and expenses in connection
therewith (regardless of whether any such Indemnitee is a party to the action
for which indemnification hereunder is sought), and including reasonable
attorneys' fees and disbursements (the "Indemnified Liabilities"), incurred by
an Indemnitee as a result of, or arising out of, or relating to (a) any breach
of any representation or warranty made by the Company herein or in any other
certificate, instrument or document contemplated hereby or thereby, (b) any
breach of any covenant, agreement or obligation of the Company contained herein
or in any other certificate, instrument or document contemplated hereby or
thereby or (c) any cause of action, suit or claim brought or made against such
Indemnitee and arising out of or resulting from the execution, delivery,
performance, breach or enforcement of this Agreement or the Registration Rights
Agreement or Warrants by the Company. To the extent that the foregoing
undertaking by the Company is unenforceable for any reason, the Company will
make the maximum contribution to the payment and satisfaction of each of the
Indemnified Liabilities that is permissible under applicable law.

         The Indemnitees 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 Indemnitees unless: (i)
the Company has agreed in writing to pay such fees and expenses; (ii) the
Company shall have failed to promptly assume the defense of such proceeding and
to employ counsel reasonably satisfactory to such Indemnitees in any such
proceeding; or (iii) the named parties to any such proceeding (including any
impleaded parties) include both such Indemnitees and the Company, and such
Indemnitees shall have been advised by counsel that a conflict of interest is
likely to exist if the same counsel were to represent such Indemnitees and the
Company (in which case, if such Indemnitees notify the Company in writing that
they elect to employ separate counsel at the expense of the Company, the Company
shall not have the right to assume the defense thereof and such counsel shall be
at the reasonable expense of the Company; provided, however, that in no event
shall the Company be responsible for the fees and expenses of more than one
separate counsel). The Company shall not be liable for any settlement of any
such proceeding effected without its written consent, which consent shall not be
unreasonably withheld. The Company shall not, without the prior written consent
of a majority of the Indemnitees, effect any settlement of any pending
proceeding in respect of which Indemnitees are a party, unless such settlement
includes an unconditional release of such Indemnitees from all liabilities that
are the subject matter of such proceeding. Subject to the foregoing, all fees
and expenses (including reasonable fees and expenses to the extent incurred in
connection with investigating or preparing to defend any such proceeding in a
manner inconsistent with this Article VIII) of the Indemnitees shall be paid to
the Indemnitees as incurred, within ten (10) business days of written notice
thereof to the Company, which notice shall be delivered no more frequently than
on a monthly basis; provided, that the Indemnitees shall reimburse the Company
for any and all such fees and expenses to the extent it is finally judicially
determined that such Indemnitees are not entitled to indemnification hereunder.

                                       14

<PAGE>

                                   ARTICLE IX
                                   DEFINITIONS

         9.1      "Closing" means the closing of the purchase and sale of the
Securities under this Agreement.

         9.2      "Closing Date" has the meaning set forth in Section 1.3.

         9.3      "Common Shares" has the meaning set forth in the Recitals.

         9.4      "Common Stock" means the common stock, par value $.001 per
share, of the Company.

         9.5      "Company" means Sonus Pharmaceuticals, Inc.

         9.6      "Exchange Act" means the Securities Exchange Act of 1934, as
amended.

         9.7      "Indemnified Liabilities" has the meaning set forth in Article
VIII.

         9.8      "Indemnitees" has the meaning set forth in Article VIII.

         9.9      "Investors" means the investors whose names are set forth on
the signature pages of this Agreement, and their permitted transferees.

         9.10     "Material Adverse Effect" means a material adverse effect on
(a) the business, operations, prospects, assets or financial condition of the
Company or (b) the ability of the Company to perform its obligations pursuant to
the transactions contemplated by this Agreement or under the agreements or
instruments to be entered into or filed in connection herewith, including the
Registration Rights Agreement and the Warrants.

         9.11     "Nasdaq" means the Nasdaq National Market System.

         9.12     "Offering Memorandum" has the meaning set forth in Section
2.4.

         9.13     "Registration Rights Agreement" means the Registration Rights
Agreement, dated as of the date of this Agreement and among the parties to this
Agreement, in the form attached hereto as Exhibit D.

         9.14     "Regulation D" means Regulation D as promulgated under by the
SEC under the Securities Act.

         9.15     "Rule 144" and "Rule 144(k)" mean Rule 144 and Rule 144(k),
respectively, promulgated under the Securities Act, or any successor rule.

         9.16     "SEC" means the United States Securities and Exchange
Commission.

         9.17     "SEC Documents" has the meaning set forth in Section 3.6.

         9.18     "Securities" has the meaning set forth in the Recitals.

                                       15

<PAGE>

         9.19     "Securities Act" means the Securities Act of 1933, as amended,
and the rules and regulations thereunder, or any similar successor statute.

         9.20     "Warrants" and "Warrant Shares" have the meanings set forth in
the Recitals.

                                   ARTICLE X
                          GOVERNING LAW; MISCELLANEOUS

         10.1     Governing Law; Jurisdiction; Jury Trial Waiver. This Agreement
will be governed by and interpreted in accordance with the laws of the State of
Delaware 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 Delaware 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.

         10.2     Counterparts; Signatures by Facsimile. This Agreement may be
executed in two or more counterparts, all of which are considered one and the
same agreement and will become effective when counterparts have been signed by
each party and delivered to the other parties. This Agreement, once executed by
a party, may be delivered to the other parties hereto by facsimile transmission
of a copy of this Agreement bearing the signature of the party so delivering
this Agreement.

         10.3     Headings. The headings of this Agreement are for convenience
of reference only, are not part of this Agreement and do not affect its
interpretation.

         10.4     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.

         10.5     Entire Agreement; Amendments. This Agreement and the
Registration Rights Agreement (including all schedules and exhibits thereto) and
the Warrants 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. No provision of this Agreement may be waived or amended other than by an
instrument in writing signed by the party to be charged with enforcement.

         10.6     Notices. Any notices required or permitted to be given under
the terms of this Agreement must be sent by certified or registered mail (return
receipt requested) or delivered personally or by courier (including a recognized
overnight delivery service) or by facsimile and will be effective five days
after being placed in the mail, if mailed by regular U.S. mail, or upon receipt,
if delivered personally, by courier (including a recognized overnight delivery
service) or by facsimile, in each case addressed to a party. The addresses for
such communications are:

                                       16

<PAGE>

         If to the Company:                Chief Financial Officer
                                           Sonus Pharmaceuticals, Inc.
                                           22026 20th Avenue S.E.
                                           Bothell, Washington 98021
                                           Fax:  (425) 489-0626

         With copies to:                   K.C. Schaaf, Esq.
                                           Stradling Yocca Carlson & Rauth
                                           660 Newport Center Drive, Suite 1600
                                           Newport Beach, California 92660
                                           Fax:  (949) 725-4100

                                           Edwin H. Gordon
                                           Punk Ziegel & Company, L.P.
                                           520 Madison Avenue
                                           New York, New York 10020
                                           Fax:  (212) 308-2203

         If to an Investor: To the address set forth immediately below such
Investor's name on the signature pages hereto.

         Each party will provide written notice to the other parties of any
change in its address in accordance with the notice provisions hereof.

         10.7     Successors and Assigns. This Agreement is binding upon and
inures to the benefit of the parties and their successors and assigns. The
Company will not assign this Agreement or any rights or obligations hereunder
without the prior written consent of the Investors, and no Investor may assign
this Agreement or any rights or obligations hereunder without the prior written
consent of the Company. Notwithstanding the foregoing, an Investor may assign
all or part of its rights and obligations hereunder to any of its "affiliates,"
as that term is defined under the Securities Act, without the consent of the
Company so long as the affiliate is an accredited investor (within the meaning
of Regulation D under the Securities Act) and agrees in writing to be bound by
this Agreement. This provision does not limit the Investor's right to transfer
the Securities pursuant to the terms of this Agreement or to assign the
Investor's rights hereunder to any such transferee pursuant to the terms of this
Agreement.

         10.8     Third Party Beneficiaries. This Agreement is intended for the
benefit of the parties hereto and their respective permitted successors and
assigns, and, except as contemplated in Section 2.10, is not for the benefit of,
nor may any provision hereof be enforced by, any other person.

         10.9     Survival. The representations and warranties of the Company
and the agreements and covenants set forth herein will survive the Closing
hereunder for a period of twelve (12) months. The Company makes no
representations or warranties in any oral or written information provided to
Investors, other than the representations and warranties included herein.

         10.10    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

                                       17

<PAGE>

the intent and accomplish the purposes of this Agreement and the consummation of
the transactions contemplated hereby.

         10.11    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.

         10.12    Equitable Relief. The Company recognizes that, if it fails to
perform or discharge any of its obligations under this Agreement, any remedy at
law may prove to be inadequate relief to the Investors. The Company therefore
agrees that the Investors are entitled to seek temporary and permanent
injunctive relief in any such case.

                                       18

<PAGE>

         IN WITNESS WHEREOF, the undersigned Investors and the Company have
caused this Securities Purchase Agreement to be duly executed as of the date
first above written.

                                            COMPANY:

                                            SONUS PHARMACEUTICALS, INC.

                                            By:_________________________________

                                                 Name:__________________________

                                                 Title:_________________________

For purposes of Section 2.10 hereof:

PUNK ZIEGEL & COMPANY

By:__________________________________
    Edwin H. Gordon
    Managing Director

                                       19

<PAGE>

                            OMNIBUS SIGNATURE PAGE TO
                           SONUS PHARMACEUTICALS, INC.
                          SECURITIES PURCHASE AGREEMENT

         The undersigned hereby executes and delivers the Securities Purchase
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.

                                      Sign Name:________________________________

                                      Print Name:_______________________________

                                      Address:__________________________________
                                              __________________________________
                                              __________________________________

                                      Telephone:________________________________
                                      Facsimile:________________________________

                                      Number of Securities Purchased:

                                      Common Shares:____________________________
                                      Warrants (Number of Warrant Shares):______

                                       20

<PAGE>

                              SCHEDULE OF INVESTORS

                                       21

<PAGE>

                                    Exhibit A
                                 Form of Warrant

                                   Exhibit A-1

<PAGE>

                                    Exhibit B
                           Wire Transfer Instructions

Please remit payment to:

         Wells Fargo Bank
         5 Corporate Plaza
         Newport Beach, CA  92660

         Routing #:        121 000 248
         Account #:        0643108848

         A/C Name:         Stradling Yocca Carlson & Rauth
                           Trust Account

                                   Exhibit B-1

<PAGE>

                                    Exhibit C
                             Investor Questionnaire

I CERTIFY THAT I AM AN ACCREDITED INVESTOR BECAUSE I FALL WITHIN ONE OF THE
FOLLOWING CATEGORIES.

____ A natural person whose individual net worth, or joint net worth with that
person's spouse, at the time of his purchase exceeds $1,000,000;

____ A natural person who had "Individual Income" in excess of $200,000 in each
of the two most recent years or joint income with that person's spouse in excess
of $300,000 in each of those years and has a reasonable expectation of reaching
the same income level in the current year;

____ An employee benefit plan within the meaning of the Employee Retirement
Income Security Act of 1974, and the investment decision is made by a plan
fiduciary, as defined in Section 3(21) of such act, which is either a bank,
savings and loan association, insurance company or registered investment advisor
or if the employee benefit plan has total assets in excess of $5,000,000, or, if
a self-directed plan, with investment decisions made solely by persons that are
Accredited Investors;

____ A bank as defined in Section 3(a)(2) of the Securities Act, or any savings
and loan association or other institution as defined in Section 3(a)(5)(A) of
the Securities Act, whether acting in its individual or fiduciary capacity;

____ A broker or dealer registered pursuant to Section 15 of the Securities
Exchange Act of 1934, as amended;

____ An insurance company as defined in Section 2(13) of the Securities Act;

____ An investment company registered under the Investment Company Act of 1940
or a business development company as defined in Section 2(a)(48) of that Act;

____ A Small Business Investment Company licensed by the U.S. Small Business
Administration under Section 301(c) or (d) of the Small Business Investment Act
of 1958;

____ A plan established and maintained by a state, its political subdivisions,
or any agency or instrumentality of a state or its political subdivisions, for
the benefit of its employees, if such plan has total assets in excess of
$5,000,000;

____ A private business development company as defined in Section 202(a)(22) of
the Investment Advisers Act of 1940;

____ An organization described in Section 501(c)(3) of the Internal Revenue
Code, corporation, Massachusetts or similar business trust, or partnership, not
formed for the specific purpose of acquiring the securities offered, with total
assets in excess of $5,000,000;

____ A director, executive officer, or general partners of the issuer of the
securities being offered or sold, or any director, executive officer, or general
partner of a general partner of that issuer;

___ A trust, with total assets in excess of $5,000,000, not formed for the
specific purpose of acquiring the securities offered, whose purchase is directed
by a sophisticated person who has such

                                       C-1

<PAGE>

knowledge and experience in financial and business matters that such person is
capable of evaluating the merits and risks of investing in the Company; or

____ An entity in which all of the equity owners qualify under any of the above
subparagraphs.

NET WORTH. The term "net worth" means the excess of total assets over total
liabilities. In calculating net worth, the stockholder may include the estimated
fair market value of the stockholder's principal residence as an asset.

INCOME. In determining individual "income," the stockholder should add to the
stockholder's individual taxable adjusted gross income (exclusive of any spousal
income) any amounts attributable to tax exempt income received, losses claimed
as a limited partner in any limited partnership, deductions claimed for
depletion, contributions to an IRA or Keogh retirement plan, alimony payments,
and any amount by which income from long-term capital gains has been reduced in
arriving at adjusted gross income.

Dated:  July ___, 2003              ____________________________________________

                                  Exhibit C-2

<PAGE>

                                    Exhibit D

                          Registration Rights Agreement

                                   Exhibit D-1

</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10.2
<SEQUENCE>5
<FILENAME>v92220exv10w2.txt
<DESCRIPTION>EXHIBIT 10.2
<TEXT>
<PAGE>

                                                                    Exhibit 10.2

                          REGISTRATION RIGHTS AGREEMENT

         This REGISTRATION RIGHTS AGREEMENT, dated as of July 25, 2003 (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 July 25,
2003 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 3,930,071 shares
of the Company's Common Stock (the "Common Shares") and warrants to purchase up
to 1,965,031 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).

<PAGE>

         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 sold pursuant to the Purchase Agreement.

         1.11     "Warrant Shares" means the shares of the Company's Common
Stock 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 for resale within 30 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, 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 the 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 the Closing Date (the "Required Effective Date").
However, so long as the Company filed the Registration Statement within 30 days
after the Closing 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 the Registration Statement receives SEC review, then the Required
Effective Date will be the 120th day after the Closing Date. In the case of an
SEC response described in clause (a),

                                       2

<PAGE>

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 the Registration Statement will receive no action
or review from the SEC, then the Company will cause the Registration Statement
to become effective within five business days after such SEC notification. Once
the Registration Statement is declared effective by the SEC, the Company will
cause the 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 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 this Section 2.2 and shall be made in
shares of Common Stock, valued at the average closing sale prices of the
Company's Common Stock during five (5) trading days ending on the day prior to
the Payment Date, provided, that the total number of shares of the Company's
Common Stock payable pursuant to this Section 2.2 to any Investor shall not
exceed the lower of (i) the aggregate number of shares purchased pursuant to the
Purchase Agreement by such Investor and (ii) the number of shares, less one
share, which, if issued, would have, at the time of the Closing Date or the
Payment Date, required shareholder approval of such issuance pursuant to Section
4350(i)(1)(D) of the Nasdaq Marketplace Rules. In the event the number of shares
of the Company's Common Stock issuable under this Section 2.2 is restricted by
the limitations in the previous sentence, the balance of the damages payable by
the Company pursuant to this Section 2.2 shall be paid in cash on the applicable
Payment Date in accordance with payment instructions provided by each Investor.

         2.3      Piggyback Registrations.

                  (a)      If, at any time prior to the expiration of the
Registration Period, the Registration Statement contemplated in Section 2.1
above is not declared effective with respect to all of the Registrable
Securities 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 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

                                       3

<PAGE>

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 Statement 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.

                                  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 the 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
30 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.

         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

                                       4

<PAGE>

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.

         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,

                                       5

<PAGE>

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 forty-five 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
f 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 seven (7)
days) prior to their filing with the SEC, 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.

                                       6

<PAGE>

         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.

                  (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

                                       7

<PAGE>

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).

         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.

                                       8

<PAGE>

                                   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. If, within three
business days prior to the filing date, the Company has not received the
requested information from an Investor, then 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.

         (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.

                                       9

<PAGE>

                                   ARTICLE V
                            EXPENSES OF REGISTRATION

         The Company will bear all reasonable 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 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

                                       10

<PAGE>

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, 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.

         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

                                       11

<PAGE>

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.

                                  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

                                       12

<PAGE>

                  (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.

                                   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.

                                       13

<PAGE>

         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 Delaware 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 Delaware 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.

         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.

                                       14

<PAGE>

         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.

                                       15

<PAGE>

         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.

                                          COMPANY:

                                          SONUS PHARMACEUTICALS, INC.

                                          By:___________________________________
                                          Name:_________________________________
                                          Title:________________________________

                                       16

<PAGE>

                            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.

                                              Sign Name:________________________
                                              Print Name:_______________________
                                              Address:__________________________
                                                      __________________________
                                                      __________________________

                                              Telephone: _______________________
                                              Facsimile:________________________

                                              Number of Common Shares:__________
                                              Number of Warrant Shares:_________

                                       17

</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-99.1
<SEQUENCE>6
<FILENAME>v92220exv99w1.htm
<DESCRIPTION>EXHIBIT 99.1
<TEXT>
<HTML>
<HEAD>
<TITLE>EXHIBIT 99.1</TITLE>
</HEAD>
<BODY bgcolor="#FFFFFF">
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<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<P align="right"><FONT size="2">Exhibit&nbsp;99.1</FONT>
<P>
<IMG src="v92220v9222000.gif" alt="(SONUS PHARMACEUTICALS LOGO)" align="right">
<P align="left"><FONT size="2"><I>NEWS RELEASE</I>
</FONT>
<P>
<P align="center"><FONT size="2"><B>Sonus Pharmaceuticals Announces $14.2 Million Private Placement Financing</B>
</FONT>
<P align="left"><FONT size="2"><B>BOTHELL, Washington &#150; July&nbsp;29, 2003 &#150; </B>Sonus Pharmaceuticals, Inc. (Nasdaq:SNUS)
today announced that it has raised $14.2&nbsp;million in gross proceeds
(approximately $13.1&nbsp;million in net proceeds after expenses) through the
private placement of 3.9&nbsp;million newly issued shares of Sonus common stock to
several new and current institutional shareholders at a purchase price of $3.56
per share. For an additional $0.125 per underlying share, the investors also
purchased 1.95&nbsp;million five-year warrants with an exercise price of $4.09
per share. Punk Ziegel &#038; Company acted as the placement agent for the
financing.
</FONT>
<P align="left"><FONT size="2">&#147;We are pleased to have the support and confidence of the excellent group of
investors participating in this financing. Raising these funds provides us
with greater flexibility to accelerate initiation of the late-stage clinical
studies for our lead cancer product, TOCOSOL&#153; Paclitaxel, and to continue to
advance other products in our pipeline,&#148; said Michael A. Martino, President and
Chief Executive Officer of Sonus Pharmaceuticals.
</FONT>
<P align="left"><FONT size="2">The securities issued in the private placement have not been registered under
the Securities Act of 1933, as amended, and may not be offered or sold in the
United States absent registration under the Securities Act and applicable state
securities laws or an applicable exemption from those registration
requirements.
</FONT>
<P align="left"><FONT size="2">About Sonus Pharmaceuticals
</FONT>
<P align="left"><FONT size="2">Sonus is developing a number of potential product candidates for the treatment
of cancer and other serious diseases utilizing its proprietary TOCOSOL drug
delivery technology. The development of therapeutic drugs with the TOCOSOL
technology may result in products that can be delivered more safely and
effectively. The Company&#146;s news releases and other information are available
on the Sonus web site at www.sonuspharma.com.
</FONT>
<P align="left"><FONT size="2">About TOCOSOL Paclitaxel
</FONT>
<P align="left"><FONT size="2">TOCOSOL Paclitaxel is a ready-to-use formulation of paclitaxel, one of the
world&#146;s most widely prescribed anticancer drugs. TOCOSOL Paclitaxel does not
require reconstitution, dilution or preparation as with the currently marketed
paclitaxel products and other paclitaxel formulations
</FONT>
<P align="right"><FONT size="2">More...</FONT>
<P align="center"><FONT size="2">&nbsp;</FONT>
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<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>
<P align="center"><FONT size="2">2</FONT>


<P align="left"><FONT size="2">under development. In clinical studies to date, TOCOSOL Paclitaxel is
demonstrating favorable anti-tumor activity in cancer patients who have failed
prior chemotherapeutic regimens. The
</FONT>
<P align="left"><FONT size="2">product is also showing excellent tolerability over multiple treatment cycles,
and as a result, most patients do not need to have doses reduced or delayed.
TOCOSOL Paclitaxel is administered to patients in a short 15-minute infusion,
compared to the prolonged three-hour infusion required with available
paclitaxel products.
</FONT>
<P align="left"><FONT size="2">Contact: Pamela L. Dull, Investor Relations Manager, Sonus Pharmaceuticals,
(425)&nbsp;487-9500.
</FONT>
<P align="left"><FONT size="2">Forward-looking Statements
</FONT>
<P align="left"><FONT size="2">Certain statements made in this press release are forward-looking such as
those, among others, relating to the development of drug delivery products and
potential applications for these products. As discussed in the Sonus
Pharmaceuticals Annual Report on Form&nbsp;10-K filed with the Securities and
Exchange Commission on March&nbsp;10, 2003, actual results could differ materially
from those projected in the forward-looking statements as a result of the
following factors, among others: the Company&#146;s products will require extensive
clinical testing and approval by regulatory authorities; such approvals are
lengthy and expensive and may never occur; risks that clinical studies with
TOCOSOL Paclitaxel will not be successful or demonstrate increased efficacy;
risks of successful development of additional drug delivery products;
variability of quarterly operating results, primarily due to timing and costs
of clinical trials; risks that the Company will not receive any future
collaborative partner payments or other external financing on acceptable terms
or at all.
</FONT>

<P align="center"><FONT size="2">###</FONT>
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