MASTER SERVICES AGREEMENT AS AMENDED between LONZA BIOLOGICS TUAS PTE LTD and OMEROS CORPORATION

2.1 (a)

Lonza shall itself and through its Affiliates, diligently carry out the Services as provided in this Agreement and each SOW, and shall use reasonable endeavours to perform the Services without defect and according to the estimated timelines as set forth in this Agreement and each applicable SOW or Binding Order. Lonza will, in accordance with the terms of this Agreement and the Quality

2.1 (b)

Lonza shall retain appropriately qualified and trained personnel with the requisite knowledge and experience to perform the Services in accordance with this Agreement. Lonza may subcontract or delegate any portion of the Services under this Agreement to a Third Party analytical laboratory or other Third Party only with Omeros’ advance written approval, not to be unreasonably withheld; provided, that any such subcontracted Third Party shall be subject to the same obligations and other provisions contained in this Agreement and any applicable SOW or Binding Order and Lonza shall be responsible for such subcontracted services, unless such subcontracted Third Party has been selected by Omeros, in which case Lonza shall not be responsible for such subcontracted services.

2.2

Lonza shall manufacture cGMP Product in accordance with the Master Batch Record to meet the Specifications using the Omeros Cell Line, provided that there shall be no such obligation to meet the Specifications in respect of the [***] cGMP Batch manufactured following any material change in the Process agreed to or requested by Omeros in writing, provided, however, that in such cases Lonza shall still be required to use commercially reasonable efforts to meet the Specifications and shall still comply with all Applicable Laws and Lonza’s standard operating procedures.

2.3

The quantities of Product for Delivery set out in Purchase Orders are estimates only, which quantities Lonza shall use commercially reasonable efforts to meet. Promptly following First Approval and the manufacture of the [***] cGMP Batch manufactured on or after [***] by Lonza for Omeros at each facility at which Lonza manufactures Batches for Omeros, (not including batches manufactured under the Development Agreement or other development batches), and taking into account sampling from Batches, the Parties shall mutually determine and agree in writing on target yield quantities and an acceptable range of yield for future cGMP Batches along with associated pricing adjustments.

2.4

Without prejudice to Lonza’s obligations under Clauses 2.1 and 2.2, Omeros shall be entitled to cancel any unfulfilled part of the Services or to refuse to accept the Services on grounds of late performance or late delivery to the extent specified within this Agreement.

2.5

Lonza shall perform the Services in compliance with this Agreement, the applicable SOW, all Applicable Laws and Lonza’s standard operating procedures applicable to the Services.

2.6

Lonza shall not use the Cell Line, the Omeros Process, Omeros Patent Rights, Omeros Materials or Omeros Information (or any part thereof) [***] for any purpose other than the performance of the Services for Omeros under this Agreement. [***].

2.7

Lonza shall:

2.8

Omeros acknowledges and agrees that this Agreement is entered into so that Lonza can provide the Services based on the options provided below:

2.9

Unless otherwise agreed by the parties in writing or specified in the applicable SOW, Lonza shall provide all supplies (other than the materials as provided for in any SOW) and standard processing and manufacturing equipment needed for completion of the Services, at its sole cost and expense unless otherwise provided for in a SOW (including, without limitation, shipping costs in connection with such supplies and equipment). All Omeros-specific supplies and Omeros-dedicated equipment shall be specified in the SOW and shall be purchased at Omeros’ reasonable cost and expense.

2.10

At Lonza’s expense, Lonza shall be responsible for destruction of any and all waste, including hazardous waste, including, without limitation, rejected Product, in accordance with the Applicable Laws. Provided, however, the destruction by Lonza of any Resins owned by Omeros shall be at Omeros’ request and expense.

2.11

Lonza shall, at its own cost and expense, with a reputable and solvent insurance provider, obtain and maintain in full force and effect the following insurance during the Term: (a) commercial general liability insurance with a per-claim limit of not less than [***] USD; and (b) products and completed operations liability insurance with a per-occurrence limit of not less than [***] USD and an annual aggregate limit of not less than (i) [***] USD prior to Launch and (ii) not less than [***] USD after Launch. Lonza shall supply Omeros with a copy of the certificate of insurance upon reasonable request and shall not terminate or materially decrease the level of coverage of such policies during the Term of this Agreement.

2.12

The Parties shall enter into a separate quality agreement (the “Quality Agreement”) to define their responsibilities in relation to the disposition of the Product. In the event of any conflict between the

2.13

Omeros shall be permitted to have, at no additional cost, one (1) employee or contracted representative at the Facility as reasonably requested by Omeros, at any time during the Process for the purpose of observing, reporting on, and consulting as to the performance of the Services. Such employee or contracted representative shall be subject to abide by confidentiality obligations as set forth herein and Lonza’s customary practices and operating procedures regarding persons in plant, and such employee agrees to comply with all instructions of Lonza’s employees at the Facility.

2.14

Lonza reserves the right to initiate any and all required investigational work, such as that related to out of Specification (“OOS”) investigations as set out further under a separate Quality Agreement. Lonza will inform Omeros of such investigational work as soon as reasonably practicable. Lonza will seek Omeros’ approval prior to beginning such investigational work if any costs would be incurred in connection with such work would be chargeable to Omeros at Lonza’s standard rates.

2.15

Raw Materials. Lonza shall procure all required Raw Materials other than those raw materials that are Omeros Materials. Omeros shall be responsible for payment of Raw Materials irrevocably committed to be procured by Lonza under a Binding Order hereunder that are not (as reasonably determined by Lonza) returnable or useable for other customers.

2.16

For any regulatory support services for Approval of the Product in each Territory that Omeros requests, the cost of any such regulatory support will be paid for by Omeros in accordance with Schedule 1 to this Agreement.

4.1

Omeros has supplied to Lonza the Omeros Information, together with full details of any known hazards relating to the Omeros Cell Line, if applicable, and/or Omeros Materials, their storage and use. Title to the Omeros Cell Line and/or Omeros Materials and/or Omeros Information supplied to Lonza is and shall remain vested in Omeros.

4.2

Omeros shall pay the Price set out in each SOW for provision of the Services other than Batch manufacture performed in accordance with this Agreement or in accordance with Schedule 1 for Batches manufactured under this Agreement, as set out in each Binding Order, together with any additional costs and expenses that fall due under this Agreement in accordance with the Terms of Payment.

4.3

Omeros hereby grants Lonza the non-exclusive right to use the Omeros Cell Line, the Omeros Materials and the Omeros Information for the sole purpose of performing the Services in accordance with this Agreement.

4.4

Omeros shall, at its own cost and expense, obtain and maintain in full force and effect products liability insurance with a reputable and solvent insurance provider with a per occurrence limit of not less than [***] USD and an annual aggregate limit of not less than (i) [***] USD prior to Launch and (ii) not less than [***] USD following Launch. Omeros shall supply Lonza with a copy of the certificate

4.5

During the Term of the Agreement, Omeros and Lonza intend Lonza to be the supplier of a minimum of [***]% of Omeros’ requirements for Product sold by Omeros or its Affiliates, to customers, to distributors, or commercial partners (“Minimum Exclusivity”), as measured on [***] sales (i.e., [***]), over any [***] calendar year period following Launch. [***].

5.1

Product shall be Delivered EXW (ex-works) (as defined by Incoterms 2010) Lonza’s Facility which means (a) Delivery shall occur when Lonza places Product, packaged for transport in accordance with the Specifications, at the disposal of Omeros at Lonza’s premises (not cleared for export and not loaded onto a carrier’s vehicle) and (b) risk and title to Product shall pass to Omeros upon Delivery (“Deliver,” “Delivery,” or “Delivered,” as appropriate); provided, however, that Lonza shall remain responsible for storage of Product in accordance with the Specifications until Product is loaded into a carrier’s vehicle and shall remain liable for any damage or loss of Product due to improper storage during this time period. Subject to Clause 5.2, Lonza shall deliver to Omeros the signed Certificate of Analysis and a completed Certificate of Compliance not later than the date of Delivery (“Release”). Transportation of Product packaged in accordance with the Specifications, whether or not under any arrangements made by Lonza on behalf of Omeros, shall be made at the sole risk and expense of Omeros. Lonza shall provide such deliverables in accordance with the shipping and packaging instructions set forth in the Specifications or applicable SOW or as otherwise provided in advance by Omeros and agreed to by Lonza and shall provide all necessary supporting shipping information.

5.2

At Omeros’ request and subject to the agreement of both parties, Lonza will Deliver Product in quarantine prior to delivery of the Certificate of Analysis. Such request shall be accompanied by Omeros’ written acknowledgement that the Product has been Delivered without the transmittal to Omeros of a Certificate of Analysis, that accordingly the Product cannot be administered to humans until transmittal of the Certificate of Analysis, and that Omeros nevertheless accepts full risk of loss, title and ownership of the Product. The Delivery of Product in quarantine shall be subject to such testing requirements as Lonza may reasonably require, and the forty-five (45) day period referred to in Clause 5.9 shall run from the Release of Product Delivered to Omeros.

5.3

Lonza or any subcontracted Third Party that performs testing on behalf of Lonza shall perform quality control tests in accordance with the Quality Agreement and as necessary to ensure that each Batch of Product is produced in accordance with and conforms to the Specifications and all Applicable Laws, including cGMP when applicable. All quality control test results, raw data associated with these test results and copies thereof, including notebook entries, generated by or at Lonza or by or at any subcontracted Third Party analytical laboratory, shall be made available to Omeros upon written request of Omeros at Lonza’s Facility to the extent that such information is specific to Lonza’s Facility or such subcontracted Third Party’s facility. Lonza shall provide Omeros with timely access to properly completed copies of batch records for such Batch, prepared in accordance with the Master Batch Record, Specifications and Applicable Laws, which shall accurately reflect in all material respects the processes and procedures followed by Lonza in Processing Product.

5.4

Unless otherwise agreed, Lonza shall package and label Product for Delivery in accordance with its standard operating procedures, the Master Batch Record and the Specifications. It shall be the responsibility of Omeros to inform Lonza in writing in advance of any special packaging and labelling requirements for Product. All reasonable additional costs and expenses of whatever nature to be incurred by Lonza in complying with such special requirements shall be agreed to in advance with Omeros and then charged to Omeros in addition to the Price.

5.5

If requested in writing by Omeros, Lonza will (acting as agent for Omeros for such purpose) arrange for insurance of Product whilst held by Lonza after Delivery (awaiting transportation) for a maximum of fourteen (14) days on terms equivalent to those under which Lonza insures product prior to

5.6

If requested in writing by Omeros, Lonza will (acting as agent of Omeros for such purpose) arrange the transportation of Product from Lonza’s premises to the destination indicated by Omeros together with insurance coverage for Product in transit at its invoiced value. All additional costs and expenses of whatever nature incurred by Lonza in arranging such transportation and insurance shall be charged to Omeros in addition to the Price.

5.7

Where Lonza has made arrangements for the transportation of Product, Omeros or its Third Party designee shall diligently examine the Product for transportation damage as soon as practicable after receipt. Notice of all claims (time being of the essence) arising out of:

5.8

Omeros shall make damaged Product and associated packaging materials available for inspection and shall comply with the requirements of any insurance policy covering the Product notified by Lonza to Omeros. Lonza shall offer Omeros all reasonable assistance (at the cost and expense of Omeros) in pursuing any claims arising out of the transportation of Product.

5.9

Promptly following receipt of Product or any sample thereof, Omeros may carry out any of the tests outlined or referred to in the Specifications or any SOW. Subject to Clause 2.2, if such tests show that the Product fails to meet Specifications, then Omeros shall provide Lonza written notice thereof (“Failure Notice”) within forty-five (45) days from the date of Release and shall, upon Lonza’s request and with Omeros’ agreement, return such Product to Lonza’s premises for further testing (at Lonza’s cost and expense if the Product is shown to fail to meet Specifications and such failure is due (in whole or in part) to the acts of omissions of Lonza). In the absence of such Failure Notice, Product shall be deemed to have been accepted by Omeros as meeting Specifications.

5.10

Subject to Clause 2.2, if there is any dispute concerning (i) whether Product fails to comply with Specifications or cGMP or (ii) whether such failure is due (in whole or in part) to acts or omissions of Omeros or any Third Party after Delivery, such dispute shall be referred for decision to an

5.11

Except as otherwise expressly set forth in this Agreement, the provisions of Clauses 2.4, 5.9 and 5.10 shall be the sole remedy available to Omeros in respect of Product that fails to meet Specification.

5.12

Following completion of each Batch of Product retained samples will be stored at Lonza’s Facility in accordance with the Applicable Laws, the Master Batch Record and any instructions set forth in a SOW, including for the time period of any stability study to be performed in accordance with any SOW. After the expiration of any minimum hold periods required by the Applicable Laws and/or any SOW, Lonza will notify Omeros in writing if it intends to dispose of specified samples, at Omeros’ reasonable cost, unless written instructions have been provided by Omeros to Lonza within thirty (30) days of Omeros’ receipt of such disposal notice to return samples to Omeros or a Third Party designee at Omeros’ reasonable cost. Lonza will return unused Omeros Materials to Omeros within ninety (90) days of the termination of the relevant SOW, at Omeros’ reasonable cost, unless prior written instructions have been provided by Omeros to dispose of such materials at Omeros’ reasonable cost. Lonza will store Omeros Materials free of charge during the term of the applicable SOW and for thirty (30) days thereafter.

5.13

If a Regulatory Authority orders or requires the recall of any Product supplied hereunder or if Omeros or Lonza believes a recall, field alert, biological product deviation, Product withdrawal or field correction (“Recall”) may be necessary with respect to any Product supplied under this Agreement, the Party receiving the notice from the Regulatory Authority or that holds such belief shall promptly notify the other Party in writing. With respect to any Recall, Lonza shall provide all necessary cooperation and assistance to Omeros. The cost of any Recall shall be borne by Omeros, and Omeros shall reimburse Lonza for reasonable expenses incurred in connection with any Recall, except to the extent such Recall is caused by (A) Lonza’s negligence in which case Lonza’s liability for such Recall costs and reasonable expenses is the Price charged for the recalled Product or (B) Lonza’s gross negligence or willful misconduct, in which case Lonza’s liability for such Recall costs and expenses shall not be limited. For purposes of clarification, Recall costs and reasonable expenses shall include, without limitation, notification to customers, Product retrieval, Product destruction, recall-related regulatory submissions, shipping and taxes. In the event that a Product is Recalled or Omeros is required to disseminate information relating to Product covered by this Agreement, Omeros shall so notify Lonza within a reasonable time so as to enable Lonza to provide Omeros with such assistance in connection with such Recall as may reasonably be requested by Omeros. Lonza will comply with all such reasonable requests from Omeros. Omeros shall handle exclusively the organization and implementation of all Recalls of Products. Any such Recall shall be implemented and administered in a manner that is appropriate and reasonable under the circumstances and in conformity with any requests or orders of the applicable Regulatory Authority and, to the extent consistent, accepted trade practices.

6.1

Minimum Order

6.1.1

Minimum Campaign Size. The minimum Campaign size shall be [***] Batches (“Minimum Campaign”).

6.1.2

Minimum Order. Commencing from the [***] of the [***] following Launch, Omeros commits to order and Lonza commits to supply not less than [***] Batches per calendar year (“Minimum Order”).  For purposes of illustration only, the following is an example of the calculation for commencement of the Minimum Order: If Launch occurs on [***], then Omeros’ commitment to the Minimum Order begins for the calendar year commencing [***].

6.2

Forecasting for Batches

6.2.1

Forecast. Omeros shall provide to Lonza, in writing, a rolling [***] forecast, based on desired Delivery date, of the number of Batches to be ordered in each calendar year. The forecast shall be updated [***] by Omeros (e.g., each [***]) and is non-binding (the “Forecast”).

6.2.2

Forecast Response. No later than [***] following Lonza’s receipt of a Forecast, Lonza shall respond to each Forecast (“Forecast Response”) with a written schedule to Omeros of whether it has (as of the date of receipt of the Forecast) capacity available to manufacture the number of Batches Forecasted therein, and shall provide Omeros with an estimated production schedule showing the estimated Commencement Date and Delivery date of such Batches. Lonza shall schedule all Batches for manufacture in each calendar year as [***], unless otherwise requested by Omeros in the Forecast; provided, however, that, at its option, Omeros shall have the right to split annual aggregate orders of [***] or more Batches into [***] Campaigns, each at least as large as the Minimum Campaign size. If [***] Batches during a calendar year are split into [***] Campaigns at Omeros’ request, the Batch Price shall be determined based on the size of the [***] Campaigns. If [***] Batches during a calendar year are split into [***] Campaigns by Lonza and not in response to a request by Omeros, the Batch Price shall be determined based on the aggregate number of Batches ordered in the Binding Order.

6.2.3

[***].

6.3

Purchase Orders

6.3.1

Omeros shall issue a Purchase Order for any Batches it wishes to order in accordance with the Lonza Forecast Response no later than [***] prior to the Commencement Date of each Campaign.

6.3.2

Lonza shall confirm the Commencement Date(s), Delivery date(s) and number of Batches to be Delivered to Omeros as set out in each Purchase Order within [***] of receipt from Omeros of the relevant Purchase Order. Upon acceptance of each Purchase Order from Lonza, it will then be regarded by the Parties as a binding order (“Binding Order”).  Any Commencement Date or Delivery date set forth in Lonza’s written confirmation of a Purchase Order shall be an estimated date only, provided that the estimated Commencement Date or Delivery date for a Batch by Lonza is no earlier or no later than [***] from Lonza’s most recent Forecast Response.

6.3.3

Omeros may request to add additional Batches into an existing Campaign under a Purchase Order with less than [***] prior notice and Lonza shall determine and notify Omeros within [***] of such request whether such additional Batches can be accommodated into that Campaign, creating a Binding Order if accepted by Lonza. For clarity, Lonza shall have no obligation to accept Purchase Orders for any requested additional Batches, or to reserve capacity prior to accepting such requested Purchase Orders.

6.3.4

Unless otherwise permitted by Lonza in its discretion, Omeros shall issue Purchase Orders for any Services other than Batch manufacture no later than [***] prior to the commencement of each of the Services or such earlier time as reasonably requested by Lonza.

6.3.4

Any additional or inconsistent terms or conditions of any Omeros-issued Purchase Orders, acknowledgement or similar standardized form given or received pursuant to this Agreement shall have no effect and such terms and conditions are hereby rejected, unless specifically acknowledged and accepted by Lonza.

6.4

Rescheduling

6.4.1

Lonza shall have the right to reschedule the Commencement Date and Delivery Date of any Batch or Campaign under Binding Order upon reasonable prior written notice to Omeros, delivered as soon as reasonably practicable following Lonza’s determination that it wishes to reschedule a Batch or Campaign; provided, that the rescheduled Commencement Date and Delivery Date is no earlier or no later than ninety (90) days from the Commencement Date and Release Date originally estimated at the time of Lonza’s confirmation of the Binding Order, and that any such Batches that are delayed by Lonza into a subsequent calendar year, shall count towards Omeros’ annual total for the originally scheduled calendar year for purposes of the Minimum Campaign or Minimum Order, as applicable.

6.4.2

Omeros shall have the right to request to reschedule any Batch or Campaign upon prior written notice to Lonza. Lonza shall use commercially reasonable efforts to accommodate such reschedule request from Omeros wherever possible, but whilst observing its contractual commitments of other customers. [***] Omeros acknowledges that any such rescheduling request may not be fulfilled by Lonza.

6.5

Cancellation of a Batch under Binding Order

6.5.1

Omeros shall notify Lonza of any Batches (the Binding Order for which has been confirmed) that it wishes to cancel. Lonza shall use commercially reasonable efforts to try and secure a replacement batch for a new project, whilst observing its contractual commitments of other customers.

6.5.2

If Lonza is unable to resell the cancelled Batch(es), Omeros shall pay [***] of the Batch Price for each Batch cancelled in accordance with the previously agreed Batch Price payment schedule of [***] at scheduled Commencement Date and [***] at scheduled Release date.

6.5.3

If Lonza is able to resell any cancelled capacity to any Third Party then the cancellation fee provided for under Clause 6.5.2 for that Batch shall be waivered.

6.5.4

In addition, any Raw Materials that are irrevocably committed and shall expire before use in any other production Campaign shall be invoiced by Lonza and paid for by Omeros in accordance with the previously agreed scheduled Release date and the handling fee shall be paid for by Omeros. Such Raw Materials may be either shipped to Omeros, stored for future use for Omeros, or disposed of as requested by Omeros. All such Raw Materials paid for by Omeros shall be owned by Omeros.

6.6

Supply Failure

6.6.1

Following Launch of the Product, If Lonza fails (where failure, for example, includes but is not limited to, failure to comply with the Master Batch Record during Processing of a Batch, failure of a Batch to meet Specifications, failure to Deliver a Batch, or failure due to reasons within Lonza’s control to Release a Batch) to produce [***] or more Batches within a [***] (“Supply Failure”), Lonza 's remediation plan for the Supply Failure shall be to Deliver replacement Batches within [***] (or any such timeframe as agreed between the Parties) of such Supply Failure. In the event that Lonza is unable to Deliver replacement Batches within the above timeframe, Omeros may terminate this Agreement by providing [***] advance written notice.

7.1

Unless otherwise indicated in writing by Lonza, all prices and charges are exclusive of Value Added Tax or of any other applicable taxes, levies, imposts, duties and fees of whatever nature imposed by or under the authority of any government or public authority, which shall be paid by Omeros (other than taxes on Lonza’s income). All invoices are strictly net and payment must be made within thirty (30) days of receipt of invoice unless disputed. Payment shall be made without deduction, deferment, set-off, lien or counterclaim of any nature.

7.2

Any invoices that are disputed by Omeros must be notified to Lonza in writing and within thirty (30) days of issue of the invoice by Lonza. The Parties shall meet (in person or by telephone) within ten (10) days to resolve such dispute. Payment shall be made promptly after resolution of the dispute.

7.3

In case of any default of payment on the due date:

7.4

Price Adjustments

7.4.1

Not more than once per calendar year, to be effective after March 31 of that year, Lonza may increase the Price for Batches in accordance with the US Department of Labor’s Bureau of Labor Statistics Pharmaceutical Preparations Index, [***] (or any successor index) increase for the previous calendar year. Any new Price reflecting a Batch Price adjustment shall be effective only for Purchase Orders submitted in [***] and subsequent years and any Price increase shall not exceed [***% per annum]. Purchase Orders placed in a calendar year by Omeros for Delivery of Batch(es) in that same calendar year, and accepted by Lonza, shall not be subject to any Price increase.

7.4.2

In addition to the above, the Price may be changed by Lonza, upon reasonable prior written notice to Omeros (providing reasonable detail in support thereof), to reflect (i) any change in Process conditions that materially impact Lonza cost of manufacture and (ii)  any material change in an environmental, safety or regulatory standard to the extent such change materially impacts manufacturing costs exclusive of capital expenditures.

7.4.3

In the event Omeros awards a second product to Lonza the parties shall enter into good faith discussions to review the annual Price adjustments of Clause 7.

7.5

Invoicing

7.5.1

Invoices will not be provided to Omeros until the related activity is initiated or completed.

7.5.2

Lonza shall issue invoices to Omeros for [***] percent of the Price for Batches upon the Commencement Date of each Batch and [***] percent upon Release of each Batch, unless otherwise stated in the SOW or under a Binding Order, provided, however, that if a Batch is rejected the final [***] payment shall not become due until an investigation is completed and then payment responsibility will depend on the outcome of the investigation. Lonza shall (a) issue invoices for Services (other than the manufacture of Batches) in accordance with the schedule set forth in the applicable SOW. Omeros shall pay all undisputed invoices within 30 days of receipt or as otherwise set forth in the SOW.

7.5.3

Charges for Raw Materials and the Raw Materials Fee for each Batch shall be invoiced upon the Release of each Batch.

7.5.4

The cost of Resins will be invoiced by Lonza to Omeros upon purchase of the Resins by Lonza.

7.5.5

Any External Laboratory testing costs associated with testing will be invoiced upon Delivery of Batch.

8.1

Neither Party will, as a result of this Agreement, acquire any right, title, or interest in any Intellectual Property that the other Party owns or controls as of the Effective Date of this Agreement, or that the other Party obtains ownership or control of separate and apart from the performance of the Services under this Agreement.

8.2

Lonza shall own all right, title and interest in “New General Application Intellectual Property,” which as used in this Agreement means Intellectual Property that Lonza and/or its Affiliates, contractors or agents develops, conceives, invents, reduces to practice or makes in the course of performance of the Services and that [***].

8.3

Except for and not including the New General Application Intellectual Property, Omeros shall own all right, title, and interest in (a) any and all Intellectual Property that Lonza and/or its Affiliates conceives, invents, reduces to practice, develops or makes, solely or jointly with Omeros or others, [***] and (b)[***] (collectively, the “New Omeros Intellectual Property”). Omeros grants to Lonza a non-exclusive, non-transferable, royalty-free license to use the New Omeros Intellectual Property solely to the extent necessary for Lonza to perform its obligations under this Agreement. No other license to the New Omeros Intellectual Property is hereby granted. Lonza hereby assigns to Omeros and shall continue to assign to Omeros all of its right, title and interest in any New Omeros

8.4

[***]

9.1

Lonza Warranty. Lonza warrants that:

9.2

Omeros Warranty. Omeros warrants that:

9.3

Disclaimer. THE WARRANTIES EXPRESSLY SET FORTH IN THIS AGREEMENT ARE IN LIEU OF ALL OTHER WARRANTIES, AND, EXCEPT FOR THE WARRANTIES EXPRESSLY SET FORTH IN THIS AGREEMENT, ALL OTHER WARRANTIES, BOTH EXPRESS AND IMPLIED, ARE EXPRESSLY DISCLAIMED, INCLUDING WITHOUT LIMITATION ANY WARRANTY OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE.

9.4

Indemnification by Lonza. Subject to Clauses 9.6, 9.7 and 9.8 below, Lonza shall defend, indemnify and hold harmless each of Omeros (including Affiliates) and its directors, officers, and employees and the successors and assigns of any of the foregoing (each an “Omeros Indemnitee”) from and against (i) any Third Party claim, loss, damage, costs and expenses (including court costs and legal fees on a full indemnity basis) arising directly out of any breach of the warranties given by Lonza in Clause 9.1 above or (ii) any Third Party claims alleging that Lonza’s use of Lonza Know-How (excluding use of Lonza Know-How with Omeros Materials or Omeros Information if such use of the Lonza Know-How would not be infringing unless used specifically with Omeros Materials or Omeros Information) infringes any rights (including without limitation any intellectual property rights) vested in a Third Party (whether or not Lonza knows or ought to have known the same) provided that there shall be excluded from this indemnity all Omeros revenue, in each case, to the extent that such claims resulted from the negligence, intentional misconduct or breach of this Agreement by the Omeros Indemnitee. Lonza shall further indemnify and maintain Omeros promptly indemnified against all Third Party claims, actions, costs, expenses (including court costs and legal fees on a full indemnity basis) or other liabilities whatsoever caused by the negligent act or omission of Lonza in the Processing and/or supply of Product.

9.5

Indemnification by Omeros. Subject to Clauses 9.6 and 9.7 below, Omeros shall defend, indemnify and hold harmless each of Lonza (including Affiliates) and its directors, officers, and employees

9.6

Indemnification Procedure. If a Lonza Indemnitee or Omeros Indemnitee (the “Indemnitee”) intends to claim indemnification under this Clause 9, it shall promptly notify the other Party (the “Indemnitor”) in writing of such alleged liability. The Indemnitor shall have the right to control the defence thereof with counsel of its choice as long as such counsel is reasonably acceptable to Indemnitee; provided, however, that any Indemnitee shall have the right to retain its own counsel at its own expense, for any reason, including if representation of any Indemnitee by the counsel retained by the Indemnitor would be inappropriate due to actual or potential differing interests between such Indemnitee and any other party reasonably represented by such counsel in such proceeding and provided further that the Indemnitor may not admit to any unlawful act or infringement of a Third Party’s Intellectual Property by the Indemnitee or agree to any invalidity or unenforceability of an Indemnitee’s patent rights without the indemnitee’s written consent. The Indemnitee, its employees and agents, shall reasonably cooperate with the Indemnitor and its legal representatives in the investigation of any liability covered by this Clause 9. The obligations of this Clause 9.6 shall not apply to amounts paid in settlement of any claim, demand, action or other proceeding if such settlement is effected without the consent of the Indemnitor, which consent shall not be withheld or delayed unreasonably. The failure to deliver written notice to the Indemnitor within a reasonable time after the commencement of any such action, if prejudicial to its ability to defend such action, shall relieve the Indemnitor of any obligation to the Indemnitee under this Clause 9. It is understood that only Lonza or Omeros may claim indemnity under this Clause 9 (on its own behalf or on behalf of its Indemnitees), and other Indemnitees may not directly claim indemnity hereunder.

9.7

Disclaimer of Consequential Damages. Subject to the second sentence of this Clause 9.7, in no event shall either Party be liable to the other Party for incidental, indirect, special, punitive or consequential damages arising from or related to breach of this Agreement. The foregoing disclaimer of damages shall not apply in the case of (a) breach of Clause 10 (Confidentiality), (b) personal injury or death, or (c) grossly negligent or intentionally wrongful acts or omissions.

9.8

Limitation of Liability. Except for Lonza’s indemnification obligations under Clause 9.4 and the exceptions set forth in the second sentence of Clause 9.7 and the second sentence of this Clause 9.8, in no event shall Lonza’s liability to Omeros for direct damages arising from or related to breach of this Agreement exceed [ ***] payable under this Agreement for Services, including under any Binding Orders not yet completed, by Omeros. The foregoing limitation of liability shall not apply in the case of (a) breach of Clause 10 (Confidentiality), (b) personal injury or death, or (c) grossly negligent or intentionally wrongful acts or omissions.

10.1

Omeros acknowledges that Lonza Know-How and Lonza acknowledges that Omeros Information with which it is supplied by the other pursuant to the Agreement, and Omeros Information that Lonza generates for Omeros during the course of performing Services under this Agreement, is supplied or generated, subject to Clause 10.5, in circumstances imparting an obligation of confidence and each agrees to keep such Lonza Know-How or such Omeros Information secret and confidential and to respect the other's proprietary rights therein and not at any time for any reason whatsoever to disclose or permit such Lonza Know-How or such Omeros Information to be disclosed to any Third Party save as expressly provided herein.

10.2

Omeros and Lonza shall each ensure that all their respective employees, consultants, contractors and persons for whom it is responsible having access to Lonza Know-How or Omeros Information shall be subject to the same obligations of confidence and non-use as the principals pursuant to Clauses 10.1 and 10.3 and shall be bound by secrecy and non-use agreements in support of such obligations, and Omeros and Lonza may share information with such employees, consultants, contractors and persons, in accordance with the foregoing obligations, on a need-to-know basis and solely for purposes of performance under this Agreement and to permit Omeros’ development and full use of the Product in conformance with the terms of this Agreement.

10.3

Lonza and Omeros each undertake not to disclose or permit to be disclosed to any Third Party (including, except as provided in Clause 10.2 above, any contractors or consultants not previously approved in writing by the Parties, such approval not to be unreasonably withheld or delayed), or otherwise make use of or permit to be made use of other than for purposes of performance under this Agreement (a) any trade secrets or confidential information relating to the technology, business affairs or finances of the other, any subsidiary, holding company or subsidiary or any such holding company of the other, or of any suppliers, agents, distributors, licensees or other customers of the other which comes into its possession under this Agreement or (b) the commercial terms of this Agreement except as required to be disclosed by applicable laws or regulations; provided, however, that, except for filings required under the United States Securities Exchange Act of 1934 and applicable rules promulgated thereunder, in each case to any extent that such information is required to be disclosed pursuant to subpoena, court order, judicial process or otherwise by law, provided the receiving Party provides prompt notice to the disclosing Party of such requirement in order to give the disclosing Party an opportunity to timely seek a protective order or other appropriate judicial relief. In the event the disclosing Party is unable to obtain a protective order or other appropriate judicial relief, the receiving Party shall disclose only that portion of the disclosing Party’s confidential information which is legally required to be disclosed, and ensure that all such confidential information of the disclosing Party shall be redacted to the fullest extent permitted by law prior to such disclosure and that the disclosing Party shall be given an opportunity to review the confidential information prior to its disclosure.

10.4

The obligations of confidence and non-use referred to in this Clause 10 shall not extend to any information which the Party seeking to disclose such information:

10.5

The Parties acknowledge that:

10.6

Following ten (10) years after the expiration or termination of this Agreement, the Parties shall have no affirmative obligations under Clauses 10.1, 10.2 and 10.3 except with respect to trade secrets and/or know-how, for which all affirmative obligations of this Clause 10 will continue for so long as such information remains a trade secret and/or know-how under applicable law. Notwithstanding any provision to the contrary, this Clause 10.6 shall not be construed as the grant of any license or any other right to either Party to use at any time the Intellectual Property, know-how, or confidential Information of the other Party except as set forth expressly in this Agreement or in connection with the ordinary course of performance under this Agreement.

11.1

Once annually during the term of this Agreement, and subject to Lonza’s obligations of confidentiality to Third Parties, Lonza will permit Omeros to conduct one quality assurance audit of those portions of the Facilities and Quality Systems where Services are being conducted upon reasonable advance notice and at reasonable times during regular business hours, provided, however, that Omeros may conduct additional “for cause” audits following issuance of Form FDA-483s, GMP inspection reports or similar reports delivered by Regulatory Authorities to Lonza pertaining to the Processing of Product, performance of other Services for Omeros, or the occurrence of other events which are likely to adversely affect the Processing of Product or other Services for Omeros as frequently as requested by Omeros, at reasonable times and for reasonable duration, until Lonza has corrected such deficiencies and as set out further in a separate Quality Agreement. Additionally, Lonza will permit Omeros to conduct a mock pre-approval inspection audit, not to exceed three (3) days in duration or as otherwise reasonably required, in support of Regulatory Applications or cGMP Qualified Person audit to support Qualified Person batch certification.

11.2

Each Party shall notify the other Party promptly of any inspection or inquiry by any Regulatory Authority concerning the Lonza Facilities to the extent pertaining to processing of cell banks, drug substance or drug product, any SOW or Processing of Product and as set out further in a separate Quality Agreement. Each Party shall cooperate with Regulatory Authorities in connection with any such inspection or inquiry and shall cooperate with the other Party in providing the information needed for any response. Each Party acknowledges that it may not direct the manner in which the other Party fulfils its obligations to permit inspection by a Regulatory Authority.

11.3

Unless the Parties otherwise agree in writing, Lonza shall maintain materially complete and accurate batch, laboratory and other technical records related to Product for the minimum period required by Applicable Laws, in accordance with Lonza’s standard operating procedures and as set out further in the Master Batch Record and the Quality Agreement.

11.4

Lonza and Omeros shall allocate responsibility for complying with cGMP (if applicable) between themselves as set forth in the Quality Agreement. Each Party shall provide the other with all reasonable assistance and take all actions reasonably requested by the other to enable the requesting Party to comply with any Applicable Laws relating to the performance by a Party of its obligations hereunder.

11.6

Omeros shall be solely responsible for and will obtain all permits and licenses required by any Regulatory Authority with respect to the Product and any Services under this Agreement for which Omeros is responsible, including any product licenses, applications and amendments in connection therewith. Lonza will be responsible to maintain all permits and licenses required by any Regulatory Authorities in the United States, the EU and national and local jurisdictions in which the Lonza Facility is located, with respect to the Lonza Facility generally. During the Term, Lonza will assist Omeros with all regulatory matters relating to Services under this Agreement, at Omeros’ request and at Omeros’ expense. Each Party intends and commits to cooperate to satisfy all Applicable Laws relating to Services under this Agreement.

12.1

Term. This Agreement shall commence on the Effective Date and shall expire five (5) years after Launch of Product in in either US or EU territory unless terminated earlier as provided herein, or by mutual written agreement of the Parties (the “Initial Term”).

12.1.1

Three (3) years prior to the end of the Initial Term, Omeros shall provide written notice to Lonza if it wishes not to extend the Agreement for a further four (4) years (an “Extension Term”) and absent such notice the Agreement shall automatically extend for the further four (4) years The Initial Term and any Extension Term are together referred to herein as the “Term”.

12.2

If it becomes apparent to either Lonza or Omeros at any stage in the provision of the Services that it will not be possible to obtain First Approval of the Product from the Facility and written notice of such has been provided to the other Party, following such written notice a[***] day period shall be allowed for good faith discussion and attempts to resolve such problems. If such problems are not resolved within such period, Lonza and Omeros shall each have the right to terminate the Agreement forthwith by notice in writing. In the event of such termination, Omeros shall pay to Lonza all amounts owed under Purchase Orders for Batches ordered that have been cancelled by Omeros and applicable SOWs for Services performed in accordance with the SOW and this Agreement by Lonza prior to such termination (including a pro rata proportion of the Price for any stage of the Services which is in process at the date of termination) and all expenses reasonably incurred by Lonza in giving effect to such termination, including the costs of terminating any commitments entered into and in accordance the Agreement, [***].

12.3

The obligation to make payment under Clause 12.2 shall be reduced (retrospectively, and hence Lonza shall make an appropriate refund to Omeros) to the extent that Lonza mitigates its loss in this regard (and Lonza shall use commercially reasonable efforts to mitigate its loss and shall promptly notify Omeros of any such mitigation). This provision shall not entitle Omeros to be refunded an amount greater than that paid by Omeros to Lonza pursuant to this Clause 12 and Lonza shall be entitled to deduct from the amount due to be refunded to Omeros its reasonable personnel and associated costs in attempting to mitigate its loss.

12.4

For the avoidance of doubt activities relating to cGMP fermentation shall be deemed to commence with the date of removal of the vial of cells from frozen storage for the performance of the fermentation.

12.5

The Parties may each terminate the Agreement for cause forthwith by notice in writing to the other Party upon the occurrence of any of the following events:

12.6

Consequences of termination.

12.6.1

In the event of termination of this Agreement without cause by Omeros, all Services and Batches ordered pursuant to a Purchase Order shall be deemed to have been cancelled and Omeros shall pay Lonza for:

12.6.2

Termination by Lonza under Clause 12.5(a) or 12.5(b). Upon termination of this Agreement by Lonza under Clause 12.5(a) or 12.5(b), subject to Lonza’s obligations under Clause 12.7, Omeros shall pay to Lonza: (a) Termination Fees of any unpaid portions of [***]% of all Binding Orders in effect on the notification date of such termination for which Services have commenced and/or at least partial payment has been made by Omeros, less the amount of any such slots that Lonza is able to resell, (b) Termination Fees of [***]% of all Binding Orders placed but for which Services have not yet commenced and for which Omeros has not yet made any payment, less the amount of any such slots that Lonza is able to resell, and (c)  for all Services provided but not paid as of the effective date of termination (including a pro-rata proportion of the Price for any stage of the Services which is in progress at the date of the termination).

12.6.3

Termination by Omeros under Clause 12.5(a) or 12.5(b).  Upon termination of this Agreement by Omeros under Clause 12.5(a) or 12.5(b) all Binding Orders shall be deemed cancelled without any Termination Fees and Omeros shall have no further obligation to Lonza under this Agreement, except that Customer shall pay to Lonza: (a) for all Services not under dispute provided but not paid as of the effective date of termination (including a pro-rata proportion of the Price for any stage of the Services which is in progress at the date of the termination); and (b) the costs of any non-cancellable commitments of subcontractors and External Laboratories; and (c) all expenses reasonably incurred by Lonza in giving effect to such termination, in each case after reasonable efforts to mitigate all such expenses, including the costs of terminating any non-cancellable commitments entered into under the Agreement that cannot be cancelled despite reasonable efforts to do so or cannot be re-purposed for other customers.

12.7

Upon the termination of the Agreement for whatever reason:

12.8

Omeros will have the right upon its request, during the term of or within [***] following expiration or termination of this Agreement, to transfer the Cell Line and Process, to itself and any Third Party for the manufacture of that Product (but no other product) that:

12.9

Termination of this Agreement for whatever reason shall not affect the accrued rights of either Lonza or Omeros arising under or out of this Agreement and all provisions which are expressed to survive the Agreement shall remain in full force and effect.

13.1

If either Party is prevented or delayed in the performance of any of its obligations under the Agreement by Force Majeure it shall give written notice thereof to the other Party specifying the matters constituting Force Majeure together with such evidence as it reasonably can give and specifying the period for which it is estimated that such prevention or delay will continue, and it shall be excused from the performance or the punctual performance of such obligations as the case may be from the date of such notice for so long as such cause of prevention or delay shall continue. The Party that may invoke this clause shall use commercially reasonable efforts to reinstate its ongoing obligations to the other Party as soon as practicable. If the cause(s) shall continue unabated for 180 days, then both Parties shall meet to discuss and negotiate in good faith what

13.2

The expression "Force Majeure" shall be deemed to include any cause affecting the performance by a Party of the Agreement arising from or attributable to acts, events, acts of God, omissions or accidents beyond the reasonable control of the Party.

14.1

The construction, validity and performance of the Agreement shall be governed by the laws of the State of New York, USA, and Lonza and Omeros submit to the non-exclusive jurisdiction of the US Federal Courts located in the State of New York, USA.

14.2

No failure or delay on the part of either Lonza or Omeros to exercise or enforce any rights conferred on it by the Agreement shall be construed or operate as a waiver thereof nor shall any single or partial exercise of any right, power or privilege or further exercise thereof operate so as to bar the exercise or enforcement thereof at any time or times thereafter.

14.3

Any disputes relating to issues arising from this Agreement shall, in the absence of resolution within thirty (30) days of the dispute arising, be referred to the Chief Executive Officers of Omeros and Lonza, who shall discuss the matter and attempt to resolve it by mutual consent. If the Chief Executive Officers of Omeros and Lonza cannot resolve the dispute within thirty (30) days of the matter being referred to them, either Party may, by written notice to the other Party, invoke the mediation procedure set out in Clause 14.4 below.

14.4

If a dispute arises between the Parties that the Parties cannot resolve pursuant to Clause 14.3 above, the Parties agree to attempt in good faith to resolve such dispute by mediation administered by the CPR Institute for Dispute Resolution, ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇, in New York, New York, USA. The Parties agree that they shall share equally the cost of any mediation fees, and the cost of the mediator. Each Party must bear its own attorneys’ fees and associated costs and expenses. The place of any mediation shall be New York, New York, USA. If efforts at mediation are unsuccessful within sixty (60) days of either Party referring the dispute to mediation, then either Party may require that the dispute shall be resolved by binding arbitration in accordance with the then existing commercial arbitration rules of CPR Institute for Dispute Resolution, ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇. Arbitration shall be conducted in New York, New York, USA.

14.5

Nothing in this Clause 14 shall prevent a Party from exercising any right under this Agreement, including the right of termination under Clause 12 above.

15.1

Any notice or other communication to be given under this Agreement shall be delivered personally or by international express courier with delivery confirmation addressed as follows:

15.2

All such notices or other communications shall be deemed to have been served as follows:

16.1

If any provision or term of this Agreement or any part thereof shall become or be declared illegal, invalid or unenforceable for any reason whatsoever:

17.1

Lonza shall be entitled to instruct one of more of its Affiliates to perform any of Lonza’s obligations contained in this Agreement within the same Lonza Facility in which Product is Manufactured, subject to Omeros’ approval, which shall not be unreasonably withheld or delayed, of the use of such Affiliate at any other Facility or transfer of any aspect of Manufacturing to any other of Lonza’s or its Affiliates’ Facility, with no increase in costs, but Lonza shall remain fully responsible in respect of those obligations. Subject thereto, neither Party shall be entitled to assign, transfer, charge or in any way assign, sub-contract, transfer or delegate the benefit and/or the burden of this Agreement without the prior written consent of the other which consent shall not be unreasonably withheld or delayed, save that:

17.2

The obligations of the Parties under Clauses 2.8 (Omeros Cell Line and Lonza Process and Omeros Cell Line and Omeros Process), 8 (Intellectual Property), 9 (Warranties and Indemnification), 10 (Confidentiality), 12.6 (consequences of termination), 12.7 (Technology Transfer), 14 (Governing Law, Jurisdiction and Enforceability) and 17 (Miscellaneous) shall survive the termination of this Agreement for any reason.

17.3

The text of any press release or other communication to be published by or in the media concerning the subject matter of the Agreement shall require the prior written approval of Lonza and Omeros.

17.4

The Agreement embodies the entire understanding of Lonza and Omeros and there are no promises, terms, conditions or obligations, oral or written, expressed or implied, other than those contained in the Agreement. The terms of the Agreement shall supersede all previous agreements (if any) which may exist or have existed between Lonza and Omeros relating to the Services, except that with respect to the process validation Batches ordered by Omeros under the Development Agreement and the commercial Batches ordered by Omeros under the Development Agreement, all terms of this Agreement shall apply to such Batches except for the price of such Batches, which shall be as set forth in the Development Agreement rather than in this Agreement.

17.5

The Parties to this Agreement do not intend that any term hereof should be enforceable by virtue of the Contracts (Rights of Third Parties) ▇▇▇ ▇▇▇▇ by any person who is not a Party to this Agreement.

17.6

The relationship of the Parties is that of independent contractors, and neither Party will incur any debts or make any commitments for the other Party except to the extent expressly provided in this Agreement. Nothing in this Agreement is intended to create or will be construed as creating between the Parties the relationship of joint ventures, co-partners, employer/employee or principal and agent. Neither Party shall have any responsibility for the hiring, termination or compensation of the other Party’s employees or contractors or for any employee benefits of any such employee or contractor.

17.7

No variation of or addition to this Agreement or any part thereof shall be effective unless in writing and signed on behalf of both Parties. Notwithstanding the above the Parties hereby confirm that amendments to the Specification shall be effective if reduced to writing and signed by the quality and/or regulatory representative of both Parties, which quality and/or regulatory representative shall be nominated from time to time by each Party.