Exhibit 10.3

THE SECURITIES REPRESENTED BY THIS WARRANT HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AND HAVE BEEN ACQUIRED FOR INVESTMENT AND NOT WITH A
VIEW TO, OR IN CONNECTION WITH, THE SALE OR DISTRIBUTION THEREOF. NO SUCH SALE
OR DISTRIBUTION MAY BE EFFECTED WITHOUT AN EFFECTIVE REGISTRATION STATEMENT
RELATED THERETO OR AN OPINION OF COUNSEL IN A FORM SATISFACTORY TO THE COMPANY
THAT SUCH REGISTRATION IS NOT REQUIRED UNDER THE SECURITIES ACT OF 1933.

 

 

Warrant No. [CS]-[number]   Number of Shares: 133,333         Date of Issuance:
October 21, 2010   (subject to adjustment)        

OMEROS CORPORATION

Common Stock Purchase Warrant

Omeros Corporation (the “Company”), for value received, hereby certifies that
Cougar Investment Holdings LLC, or its registered assigns (the “Registered
Holder”), is entitled, subject to the terms set forth below, to purchase from
the Company, at any time after the date hereof and on or before the Expiration
Date (as defined in Section 6 below), up to 133,333 shares of Common Stock of
the Company (“Common Stock”), at a purchase price of $[20.00/30.00/40.00] per
share. The shares purchasable upon exercise of this Warrant and the purchase
price per share, as adjusted from time to time pursuant to the provisions of
this Warrant, are hereinafter referred to as the “Warrant Stock” and the
“Purchase Price,” respectively.

1. Exercise.

(a) Manner of Exercise. This Warrant may be exercised by the Registered Holder,
in whole or in part, by surrendering this Warrant, with the purchase form
appended hereto as Exhibit A duly executed by such Registered Holder or by such
Registered Holder’s duly authorized attorney, at the principal office of the
Company, or at such other office or agency as the Company may designate,
accompanied by payment in full of the Purchase Price payable in respect of the
number of shares of Warrant Stock purchased upon such exercise. The Purchase
Price may be paid by cash, certified check or wire transfer.

(b) Effective Time of Exercise. Each exercise of this Warrant shall be deemed to
have been effected immediately prior to the close of business on the day on
which this Warrant shall have been surrendered to the Company as provided in
Section 1(a) above. At such time, the person or persons in whose name or names
any shares for Warrant Stock shall be issuable upon such exercise as provided in
Section 1(d) below shall be deemed to have become the holder or holders of
record of the Warrant Stock.

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(c) Net Issue Exercise.

(i) In lieu of exercising this Warrant in the manner provided above in
Section 1(a), the Registered Holder may elect to receive shares equal to the
value of this Warrant (or the portion thereof being canceled) by surrender of
this Warrant at the principal office of the Company together with notice of such
election in which event the Company shall issue to such Holder a number of
shares of Warrant Stock computed using the following formula:

 

  X =    Y (A - B)              A

 

Where    X = The number of shares of Warrant Stock to be issued to the
Registered Holder.    Y = The number of shares of Warrant Stock purchasable
under this Warrant (at the date of such calculation).    A = The arithmetic
average of the Closing Sale Prices of the Common Stock for the five consecutive
Trading Days ending         on the Trading Day immediately preceding the date of
the Exercise Notice (the “Fair Market Value”).    B = The Purchase Price (as
adjusted to the date of such calculation).

(ii) For purposes of this Section 1(c):

“Bloomberg” means Bloomberg Financial Markets.

“Closing Sale Price” means, for any security as of any date, the last closing
trade price for such security on the Principal Market, as reported by Bloomberg,
or, if the Principal Market begins to operate on an extended hours basis and
does not designate the closing trade price, then the last trade price,
respectively, of such security prior to 4:00:00 p.m., New York time, as reported
by Bloomberg, or, if the Principal Market is not the principal securities
exchange or trading market for such security, the last closing trade price of
such security on the principal securities exchange or trading market where such
security is listed or traded as reported by Bloomberg, or if the foregoing do
not apply, the last closing trade price of such security in the over-the-counter
market on the electronic bulletin board for such security as reported by
Bloomberg, or, if no closing trade price is reported for such security by
Bloomberg, the average of the bid prices, or the ask prices, respectively, of
any market makers for such security as reported in the “pink sheets” by Pink OTC
Markets Inc. If the Closing Sale Price cannot be calculated for a security on a
particular date on any of the foregoing bases, the Closing Sale Price of such
security on such date shall be the fair market value thereof as determined by
the Board of Directors of the Company in the exercise of its good faith
judgment. All such foregoing determinations shall be appropriately adjusted for
any stock dividend, stock split, stock combination or other similar transaction
during the applicable calculation period.

“Principal Market” means The NASDAQ Stock Market, LLC.

“Trading Day” means any day on which the Common Stock is traded on the Principal
Market, or, if the Principal Market is not the principal trading market for the
Common Stock, then on the principal securities exchange or securities market on
which the Common Stock are then traded; provided that “Trading Day” shall not
include any day on which the Common Stock is scheduled to trade on such exchange
or market for less than 4.5 hours or any day that the Common Stock is suspended
from trading during the final hour of trading on such exchange or market (or if
such exchange or market does not designate in advance the closing time of
trading on such exchange or market, then during the hour ending at 4:00 p.m.,
New York time).

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(d) Delivery to Holder. As soon as practicable after the exercise of this
Warrant in whole or in part, and in any event within 10 days thereafter, the
Company at its expense will cause to be issued in the name of, and delivered to,
the Registered Holder, or as such Registered Holder (upon payment by such
Registered Holder of any applicable transfer taxes) may direct:

(i) the number of shares of Warrant Stock to which such Registered Holder shall
be entitled, which shall be delivered, at the Company’s option, either
electronically by crediting the Registered Holder’s account at DTC through its
Deposit/Withdrawal at Custodian (DWAC) system, or by physical certificate or
certificates, and

(ii) in case such exercise is in part only, a new warrant or warrants (dated the
date hereof) of like tenor, calling in the aggregate on the face or faces
thereof for the number of shares of Warrant Stock equal (without giving effect
to any adjustment therein) to the number of such shares called for on the face
of this Warrant minus the number of such shares purchased and, as applicable,
surrendered, by the Registered Holder upon such exercise as provided in
Section 1(a) or 1(c) above.

2. Adjustments.

(a) Stock Splits and Dividends. If outstanding shares of the Company’s Common
Stock shall be subdivided into a greater number of shares or a dividend in
Common Stock shall be paid in respect of Common Stock, the Purchase Price in
effect immediately prior to such subdivision or at the record date of such
dividend shall simultaneously with the effectiveness of such subdivision or
immediately after the record date of such dividend be proportionately reduced.
If outstanding shares of Common Stock shall be combined into a smaller number of
shares, the Purchase Price in effect immediately prior to such combination
shall, simultaneously with the effectiveness of such combination, be
proportionately increased. When any adjustment is required to be made in the
Purchase Price, the number of shares of Warrant Stock purchasable upon the
exercise of this Warrant shall be changed to the number determined by dividing
(i) an amount equal to the number of shares issuable upon the exercise of this
Warrant immediately prior to such adjustment, multiplied by the Purchase Price
in effect immediately prior to such adjustment, by (ii) the Purchase Price in
effect immediately after such adjustment.

(b) Reclassification, Etc. In case there occurs any reclassification or change
of the outstanding securities of the Company or any reorganization of the
Company (or any other corporation the stock or securities of which are at the
time receivable upon the exercise of this Warrant) or any similar corporate
reorganization on or after the date hereof, then and in each such case the
Registered Holder, upon the exercise hereof at any time after the consummation
of such reclassification, change, or reorganization shall be entitled to
receive, in lieu of the stock or other securities and property receivable upon
the exercise hereof prior to such consummation, the stock or other securities or
property to which such Holder would have been entitled upon such consummation if
such Holder had exercised this Warrant immediately prior thereto, all subject to
further adjustment pursuant to the provisions of this Section 2.

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(c) Adjustment Certificate. When any adjustment is required to be made in the
Warrant Stock or the Purchase Price pursuant to this Section 2, the Company
shall promptly mail to the Registered Holder a certificate setting forth (i) a
brief statement of the facts requiring such adjustment, (ii) the Purchase Price
after such adjustment and (iii) the kind and amount of stock or other securities
or property into which this Warrant shall be exercisable after such adjustment.

3. Transfers.

(a) Unregistered Security. Each holder of this Warrant acknowledges that this
Warrant and the Warrant Stock have not been registered under the Securities Act
of 1933, as amended (the “Securities Act”), and agrees not to sell, pledge,
distribute, offer for sale, transfer or otherwise dispose of this Warrant or any
Warrant Stock issued upon its exercise of the Warrant in the absence of (i) an
effective registration statement under the Securities Act as to this Warrant or
such Warrant Stock and registration or qualification of this Warrant or such
Warrant Stock under any applicable U.S. federal or state securities law then in
effect, or (ii) an opinion of counsel, satisfactory to the Company, that such
registration and qualification are not required. Each certificate or other
instrument for Warrant Stock issued upon the exercise of this Warrant shall bear
a legend substantially to the foregoing effect.

(b) Transferability. Subject to the provisions of Section 3(a), this Warrant and
all rights hereunder are transferable, in whole or in part, upon surrender of
the Warrant with a properly executed assignment (in the form of Exhibit B
hereto) at the principal office of the Company.

(c) Warrant Register. The Company will maintain a register containing the names
and addresses of the Registered Holders of this Warrant. Until any transfer of
this Warrant is made in the warrant register, the Company may treat the
Registered Holder of this Warrant as the absolute owner hereof for all purposes;
provided, however, that if this Warrant is properly assigned in blank, the
Company may (but shall not be required to) treat the bearer hereof as the
absolute owner hereof for all purposes, notwithstanding any notice to the
contrary. Any Registered Holder may change such Registered Holder’s address as
shown on the warrant register by written notice to the Company requesting such
change.

4. Representations and Warranties of the Registered Holders. Each Registered
Holder hereby represents and warrants to the Company that:

(a) Purchase Entirely for Own Account. This Warrant is issued to the Registered
Holder in reliance upon the Registered Holder’s representation to the Company,
which by the Registered Holder’s acceptance of this Agreement, the Registered
Holder hereby confirms, that any Warrant Stock to be acquired by the Registered
Holder upon exercise of this Warrant will be acquired for investment for the
Registered Holder’s own account, not as a nominee or agent, and not with a view
to the resale or distribution of any part thereof, and that the Registered
Holder has no present intention of selling, granting any participation in, or

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otherwise distributing the same. By accepting this Warrant, the Registered
Holder further represents that the Registered Holder does not presently have any
contract, undertaking, agreement or arrangement with any person to sell,
transfer or grant participations to such person or to any third person, with
respect to any of the Warrant Stock. The Registered Holder has not been formed
for the specific purpose of acquiring the Warrant Stock.

(b) Disclosure of Information. The Registered Holder has had an opportunity to
discuss the Company’s business, management, financial affairs and the terms and
conditions of the Warrant with the Company’s management and has had an
opportunity to review the Company’s facilities.

(c) Restricted Securities. The Registered Holder understands that the Warrant
Stock has not been, and will not be, registered under the Securities Act, by
reason of a specific exemption from the registration provisions of the
Securities Act which depends upon, among other things, the bona fide nature of
the investment intent and the accuracy of the Registered Holder’s
representations as expressed herein. The Registered Holder understands that the
shares of Warrant Stock are “restricted securities” under applicable U.S.
federal and state securities laws and that, pursuant to these laws, the
Registered Holder must hold the Warrant Stock indefinitely unless such shares
are registered with the Securities and Exchange Commission and qualified by
state authorities, or an exemption from such registration and qualification
requirements is available. The Registered Holder acknowledges that, except as
set forth herein, the Company has no obligation to the Registered Holder to
register or qualify the Warrant Stock for resale. The Registered Holder further
acknowledges that if an exemption from registration or qualification is
available, it may be conditioned on various requirements including, but not
limited to, the time and manner of sale, the holding period for the Warrant
Stock, and on requirements relating to the Company which are outside of the
Registered Holder’s control, and which the Company is under no obligation and
may not be able to satisfy.

(d) Legends. The Registered Holder understands that the Warrant Stock and any
securities issued in respect of or exchange for the Warrant Stock, may bear one
or all of the following legends:

(i) “THESE SHARES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AND
HAVE BEEN ACQUIRED FOR INVESTMENT AND NOT WITH A VIEW TO, OR IN CONNECTION WITH,
THE SALE OR DISTRIBUTION THEREOF. NO SUCH SALE OR DISTRIBUTION MAY BE EFFECTED
WITHOUT AN EFFECTIVE REGISTRATION STATEMENT RELATED THERETO OR AN OPINION OF
COUNSEL IN A FORM SATISFACTORY TO THE COMPANY THAT SUCH REGISTRATION IS NOT
REQUIRED UNDER THE SECURITIES ACT OF 1933.”

(ii) Any legend required by the Blue Sky laws of any state to the extent such
laws are applicable to the shares.

(e) Accredited Investor. The Registered Holder is an accredited investor as
defined in Rule 501(a) of Regulation D promulgated under the Securities Act.

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5. No Impairment. The Company will not, by amendment of its charter or through
reorganization, consolidation, merger, dissolution, sale of assets or any other
voluntary action, avoid or seek to avoid the observance or performance of any of
the terms of this Warrant, but will (subject to Section 15 below) 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 holder of this Warrant against impairment.

6. Termination. This Warrant (and the right to purchase securities upon exercise
hereof) shall terminate on October 21, 2015 (the “Expiration Date”).

7. Notices of Certain Transactions. In case:

(a) the Company shall take a record of the holders of its Common Stock (or other
stock or securities at the time deliverable upon the exercise of this Warrant)
for the purpose of entitling or enabling them to receive any dividend or other
distribution, or to receive any right to subscribe for or purchase any shares of
stock of any class or any other securities, or to receive any other right, to
subscribe for or purchase any shares of stock of any class or any other
securities, or to receive any other right, or

(b) of any capital reorganization of the Company, any reclassification of the
capital stock of the Company, any consolidation or merger of the Company, any
consolidation or merger of the Company with or into another corporation (other
than a consolidation or merger in which the Company is the surviving entity), or
any transfer of all or substantially all of the assets of the Company, or

(c) of the voluntary or involuntary dissolution, liquidation or winding-up of
the Company, or

(d) of any redemption of the Common Stock,

then, and in each such case, the Company will mail or cause to be mailed to the
Registered Holder of this Warrant a notice specifying, as the case may be,
(i) the date on which a record is to be taken for the purpose of such dividend,
distribution or right, and stating the amount and character of such dividend,
distribution or right, or (ii) the effective date on which such reorganization,
reclassification, consolidation, merger, transfer, dissolution, liquidation,
winding-up, redemption or conversion is to take place, and the time, if any is
to be fixed, as of which the holders of record of Common Stock (or such other
stock or securities at the time deliverable upon such reorganization,
reclassification, consolidation, merger, transfer, dissolution, liquidation,
winding-up, redemption or conversion) are to be determined. Such notice shall be
mailed at least 10 days prior to the record date or effective date for the event
specified in such notice.

8. Reservation of Stock. The Company will at all times reserve and keep
available, solely for the issuance and delivery upon the exercise of this
Warrant, such shares of Warrant Stock and other stock, securities and property,
as from time to time shall be issuable upon the exercise of this Warrant.

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9. Exchange of Warrants. Upon the surrender by the Registered Holder of any
Warrant or Warrants, properly endorsed, to the Company at the principal office
of the Company, the Company will, subject to the provisions of Section 3 hereof,
issue and deliver to or upon the order of such Holder, at the Company’s expense,
a new Warrant or Warrants of like tenor, in the name of such Registered Holder
or as such Registered Holder (upon payment by such Registered Holder of any
applicable transfer taxes) may direct, calling in the aggregate on the face or
faces thereof for the number of shares of Common Stock called for on the face or
faces of the Warrant or Warrants so surrendered.

10. Replacement of Warrants. Upon receipt of evidence reasonably satisfactory to
the Company of the loss, theft, destruction or mutilation of this Warrant and
(in the case of loss, theft or destruction) upon delivery of an indemnity
agreement (with surety if reasonably required) in an amount reasonably
satisfactory to the Company, or (in the case of mutilation) upon surrender and
cancellation of this Warrant, the Company will issue, in lieu thereof, a new
Warrant of like tenor.

11. Mailing of Notices. Any notice required or permitted pursuant to this
Warrant shall be in writing and shall be deemed sufficient upon receipt, when
delivered personally or sent by courier, overnight delivery service or confirmed
facsimile, or 48 hours after being deposited in the regular mail, as certified
or registered mail (airmail if sent internationally), with postage prepaid,
addressed (a) if to the Registered Holder, to the address of the Registered
Holder most recently furnished in writing to the Company and (b) if to the
Company, to the address set forth below or subsequently modified by written
notice to the Registered Holder.

12. No Rights as Shareholder. Until the exercise of this Warrant, the Registered
Holder of this Warrant shall not have or exercise any rights by virtue hereof as
a shareholder of the Company.

13. No Fractional Shares. No fractional shares of Common Stock will be issued in
connection with any exercise hereunder. In lieu of any fractional shares which
would otherwise be issuable, the Company shall pay cash equal to the product of
such fraction multiplied by the Fair Market Value of one share of Common Stock
on the date of exercise.

14. Amendment or Waiver. Any term of this Warrant may be amended or waived only
by an instrument in writing signed by the party against which enforcement of the
amendment or waiver is sought.

15. Headings. The headings in this Warrant are for purposes of reference only
and shall not limit or otherwise affect the meaning of any provision of this
Warrant.

16. Governing Law. This Warrant shall be governed, construed and interpreted in
accordance with the laws of the State of Washington, without giving effect to
principles of conflicts of law.

[signature page follows]

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IN WITNESS WHEREOF, the Company has caused this Warrant to be executed by its
officer thereunto duly authorized.

 

OMEROS CORPORATION By  

 

Address:   1420 Fifth Avenue, Suite 2600   Seattle, Washington 98101 Fax Number:
  (206) 264-7856

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EXHIBIT A

PURCHASE FORM

 

To:    Omeros Corporation       Dated:       ¨ Cash Exercise    ¨ Net Issue
Exercise      

(1) [Cash Exercise: The undersigned, pursuant to the provisions set forth in the
attached Warrant No. CS-[number], hereby irrevocably elects to purchase     
shares of the Common Stock covered by such Warrant and herewith makes payment of
$        , representing the full purchase price for such shares at the price per
share provided for in such Warrant.] [Net Issue Exercise: The undersigned
pursuant to the provisions set forth in the attached Warrant No. CS-[number],
hereby irrevocably elects to Net Issue Exercise with respect to      shares of
the Common Stock covered by such Warrant.]

The undersigned acknowledges that it has reviewed the representations and
warranties contained in Section 4 of the Warrant and by its signature below
hereby makes such representations and warranties to the Company. Capitalized
terms contained herein and in such representations and warranties shall have the
meanings assigned to them in the Warrant.

 

Signature:  

 

Name (print):  

 

Title (if applicable):  

 

Company (if

applicable):

 

 

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EXHIBIT B

ASSIGNMENT FORM

FOR VALUE RECEIVED,                                  hereby sells, assigns and
transfers all of the rights of the undersigned under the attached Warrant with
respect to the number of shares of Common Stock covered thereby set forth below,
unto:

 

Name of Assignee

 

Address/Fax Number

 

No. of Shares

 

Dated:                        Signature:   

 

     

 

   Witness: