exv10w28






Exhibit 10.28




COMMERCIAL SUPPLY AGREEMENT




     This Commercial Supply Agreement (this “Agreement”) is made as of the 9th day of October,
2007 (the “Effective Date”) by and between Omeros Corporation, a Washington corporation, having its
principal offices at 1420 Fifth Avenue, Suite 2600, Seattle, Washington 98101 (“Omeros”), and
Hospira Worldwide Inc., a Delaware corporation, having its principal offices at 275 North Field
Drive, Lake Forest, Illinois 60045 (“Hospira”). Omeros and Hospira previously entered into a
Master Development Agreement, dated May 8, 2007 (the “Development Agreement”), pertaining to the
development of Omeros’ pharmaceutical drug product OMS103HP-S. Omeros and Hospira now desire to
enter into an agreement for the commercial supply of OMS103HP-S by Hospira to Omeros. Therefore,
in consideration of the mutual covenants and obligations set forth below, Omeros and Hospira (the
“Parties” and each a “Party”) agree as follows:



     1. DEFINITIONS



     The following initially capitalized terms in this Agreement, whether used in the singular or
plural, shall have the respective meanings set forth below:



     1.1 “Act” means U.S. Federal Food, Drug and Cosmetic Act, 21 U.S.C. §301 et seq.



     1.2 “Affiliate” means any corporation or other entity or enterprise that controls, is
controlled by, or is under common control with, a Party. A corporation or other entity or
enterprise shall be regarded as in control of another corporation, entity or enterprise if it owns
or directly or indirectly controls 50% or more of the voting securities or other ownership interest
of the other corporation, entity or enterprise or if it possesses, directly or indirectly, the
power to direct or cause the direction of the management and policies of the corporation or other
entity or enterprise.



     1.3 “APIs” means the active pharmaceutical ingredients required for the Processing of Product
as set forth in the Specifications.



     1.4 “Applicable Laws” means all laws, ordinances, rules and regulations applicable to the
Product and the Services (including Processing of Product or any aspect thereof) and the
obligations of Hospira or Omeros, as the context requires under this Agreement, including, without
limitation, (a) all applicable federal, state and local laws and regulations, including without
limitation the Act, (b) all applicable FDA regulations promulgated under the Act, (c) all
applicable cGMPs, (d) all applicable guidances promulgated or adopted by FDA, including without
limitation all applicable International Conference on Harmonization (“ICH”) guidances, each as
amended from time to time and (e) all laws and regulations within the Territory, including without
limitation ICH guidances, that are applicable to the Processing of Product for commercial supply.



     1.5 “Batch” means the Product, made in accordance with the Specifications, resulting from a
single production run, or any other specific quantity of Product that is mutually agreed upon in
writing by the Parties from time to time.





 




			
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     1.6 “Batch Records” means Batch-specific manufacturing, packaging and test records and
documentation relating to Processing, packaging and release of each Batch, exception documentation,
deviations/discrepancies and additional documentation generated and/or processed as part of the
production record of the related Batch.



     1.7 [†]



     1.8 “Certificate of Analysis” means, for each Batch produced, a document prepared by Hospira
setting forth the measured and observable characteristics of Product from the Batch, and confirming
that such Batch meets the Specifications. Each Certificate of Analysis shall include: (a) a
listing of tests performed by or on behalf of Hospira, test date(s), and test results, and a
certification of the accuracy of each of the foregoing; and (b) a reference to or inclusion of the
related Certificate of Compliance. The Parties shall from time to time agree upon a format or
formats for the Certificate of Analysis to be used under this Agreement.



     1.9 “Certificate of Compliance” means, for each Batch, a document prepared by Hospira: (a)
listing the manufacturing date, unique Batch number, and quantity of Product in such Batch, and (b)
certifying that such Batch was manufactured in accordance with Applicable Laws, including, without
limitation, cGMP. The Parties shall from time to time agree upon a format or formats for the
Certificate of Compliance to be used under this Agreement. The Certificate of Compliance may be
included within the Certificate of Analysis.



     1.10 “cGMP” means current Good Manufacturing Practices as defined in the FDA rules and
regulations, including, without limitation, the United States regulations set forth at 21 CFR Parts
210-211, as appropriate and as the same may be amended from time to time.



     1.11 “Confidential Information” means any data, research, development, manufacturing,
marketing, financial, personnel, sales, business, and other non-public, proprietary or technical
information provided by the disclosing Party to the Recipient, including without limitation all
Product Data (which shall be considered Omeros’ Confidential Information even if generated or
provided by Hospira), except any portion of such information that:




     (a) is or becomes generally available to the public or within the industry to which
such information relates, other than as a result of a breach of this Agreement; or




     (b) is known by Recipient at the time of receipt of the disclosing Party’s information,
as evidenced by Recipient’s contemporaneous written records; or




     (c) is provided to Recipient on a non-confidential basis by a third party who has the
legal right to make such disclosure; or




     (d) was or is independently developed by or for Recipient without access to or use of
the information of the disclosing Party, as evidenced by Recipient’s contemporaneous written
records.





 




			
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     1.12 “Deliver” or “Delivery” with respect to Product means, and shall take place upon, the
transfer of possession of Product to Omeros [†] for Product delivered in the United States and [†]
for Product delivered outside of the United States.



     1.13 “Develop” or “Development” shall mean the generation, improvement, optimization, transfer
or validation of methods, assays, protocols or processes for Processing, analyzing or testing
Product.



     1.14 “Facility” means Hospira’s pharmaceutical manufacturing facility in McPherson, Kansas.



     1.15 “FDA” means the United States Food and Drug Administration and any successor agency.



     1.16 “Hospira New IP” shall mean all Intellectual Property conceived solely by Hospira during
the course of the performance of the Services pursuant to this Agreement, or conceived by Hospira
prior to this Agreement (other than pursuant to the Development Agreement) and reduced to practice
solely by Hospira during the course of the performance of the Services pursuant to this Agreement,
that is not specific to [†].



     1.17 “Intellectual Property” means all intellectual property (whether or not patented or
patentable), including, without limitation, inventions, patents, patent applications, trade
secrets, know-how, copyrights, trademarks, designs, concepts, technical information, manuals,
standard operating procedures, instructions or specifications.



     1.18 “Joint New IP” shall mean Intellectual Property conceived or reduced to practice jointly
by Hospira and Omeros excluding all Omeros New IP.



     1.19 “Latent Defect” means the failure of any Product delivered to Omeros to meet the current
Specifications at the time of manufacture as a result of the acts or omissions of Hospira or its
employees, subcontractors, agents or other representatives that was not, and could not reasonably
be expected to have been, found by exercise of ordinary care in inspection and testing by Omeros.
For purposes of clarity, the presence of a contaminant from Processing or Hospira’s failure to
comply with cGMPs shall be considered a Latent Defect.



     1.20 “Master Batch Record” shall mean the formal set of instructions for Processing of
Product.



     1.21 “Materials” means, collectively, all raw materials and other ingredients (excluding APIs)
and packaging and shipping materials required for Processing Product.



     1.22 “Minimum Percentage” shall initially mean [†] of Omeros’ Product Requirements and
subsequently any adjusted percentage of Omeros’ Product Requirements as may be mutual agreed in
writing by the Parties in accordance with Section 2.6.1, 3.9.1 or 3.10.6.





 




			
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     1.23 “Omeros New IP” means any and all Intellectual Property conceived or reduced to practice
by either Party individually or jointly during the course of the performance of this Agreement that
are specific to [†].



     1.24 “Omeros’ Product Requirements” means Omeros’ total requirements for commercial sales of
Product in the Territory as well as clinical supplies of Product for the development of additional
therapeutic indications after Launch.



     1.25 “Omeros Property” means any chemical and/or biological materials or samples, other
tangible property, and written or electronic documents and records owned by or licensed to Omeros
as of the Effective Date, developed by Omeros in connection with this Agreement, or disclosed or
delivered by or on behalf of Omeros in connection with this Agreement, including, without
limitation, Omeros Confidential Information (including without limitation Product Data) and Omeros’
Intellectual Property (including without limitation Omeros New IP) in tangible or electronic form.



     1.26 “Price” means the [†] price of the Product, as set forth on Exhibit B attached
hereto and incorporated herein.



     1.27 “Process” or “Processing” shall mean the act or acts of manufacturing, handling, storing,
analyzing, testing, filling, finishing, packaging, inspecting, labeling, preparing for shipment
and/or stability testing of Product by Hospira pursuant to this Agreement.



     1.28 “Product” means a liquid formulation of Omeros’ pharmaceutical product, designated as
OMS103HP-S, which contains each of the following APIs: amitriptyline hydrochloride, oxymetazoline
hydrochloride and ketoprofen.



     1.29 “Product Data” means all information, documents, records, raw data, specimens, and other
work product that relates to or describes the Services, including the Processing of Product. The
term “Product Data” shall include, without limitation, documents and records pertaining to
Processing of Product, Batch Records, Certificates of Analysis, Certificates of Compliance,
analytical test methods, analytical test results, list of SOPs, Product Specific SOPs, list of
equipment used in the Processing of Product, signed title pages of approved qualification reports
for such equipment, general facility layout details and process trend and variability data, and all
other documents, reports and data prepared, developed or generated by Hospira in connection with
performance of the Services hereunder. The term “Product Data” shall expressly exclude, however,
General SOPs and other information that is Hospira’s confidential information that is not specific
to Omeros or Omeros’ Product and is related to Hospira’s manufacturing processes that are generally
applicable to the products of multiple customers.



     1.30 “Recipient” means a Party that receives Confidential Information.



     1.31 “Regulatory Authority” means any governmental regulatory agency or authority that is
responsible for regulating any aspect of the development, manufacture, market approval, sale,
distribution, packaging or use of the Product, including, without limitation, as applicable, based
on the Territory on the Effective Date or any expansion of the Territory by mutual written
agreement of the Parties, the FDA, the European Medicines Agency (EMEA), the Japanese





 




			
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Ministry
of Health, Labour and Welfare (MHLW), the Health Canada — Therapeutic Product Programme (TPP) and
any additional governmental agencies as agreed upon by the Parties based on expansion of the
Territory.



     1.32 “Services” means all services performed and activities conducted by Hospira (including,
without limitation, those related to process improvements and Processing of Product, as applicable)
pursuant to this Agreement and the Specifications.



     1.33 “SOPs” means Hospira’s standard operating procedures, and includes “General SOPs” that
are not specific to Processing of Product and “Product Specific SOPs” that are specific to the
Processing of Product.



     1.34 “Specifications” means the Product attributes listed on Exhibit A attached
hereto, which is incorporated into this Agreement, the Master Batch Record for Product, the master
packaging batch record for the Product, the labeling requirements for the Product, and all other
written specifications and/or instructions for measurable and observable qualities, characteristics
and attributes of Product and all other written requirements, standards, specifications, quality
assurance/quality control testing and release and other attributes pertaining to the Product and/or
Processing of Product, including APIs, other Materials and Third Party suppliers for Processing
Product, that are agreed to by the Parties (and as amended from time to time by Omeros in
consultation with Hospira, including, without limitation, such amendments as may be required to
obtain or maintain approval from the FDA or other Regulatory Authorities).



     1.35 “Technical Records” shall mean all books, records (including without limitation the
Master Batch Record and individual Batch Records for Product), test and laboratory data (including,
without limitation, Certificates of Analysis, SOPs and all other Product Data), reports and all
other information relating to the Services performed under this Agreement and the methods, Facility
and equipment used for Processing of Product or other Services.



     1.36 “Territory” shall mean [†].



     1.37 Additional Definitions.



	 	 	 
	Defined Term	 	Section in which Defined
	Agreement

	 	Preamble
	[†]

	 	10.4
	[†]

	 	10.4
	Change Order

	 	2.4
	Damages

	 	9.2
	Development Agreement

	 	Recitals
	DMF

	 	5.2
	Effective Date

	 	Preamble
	Executives

	 	12.2
	Firm Commitment

	 	3.9.2
	Firm Purchase Order

	 	3.10.1
	General SOPs

	 	1.33





 



			
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	Defined Term	 	Section in which Defined
	Hospira

	 	Preamble
	Hospira Indemnitees

	 	9.2
	ICH

	 	1.4
	Indemnified Party

	 	9.4
	Indemnifying Party

	 	9.4
	Initial Term

	 	10.1
	Launch

	 	10.4
	Minimum Purchase Requirement

	 	3.10.5
	NDA

	 	3.9.2
	Omeros

	 	Preamble
	Omeros Indemnitees

	 	9.3
	Party and/or Parties

	 	Preamble
	Product and Equivalents

	 	7.1
	Product Specific SOPs

	 	1.33
	Purchase Order

	 	3.10.1
	Quality Agreement

	 	3.2
	Representative

	 	2.5
	Rolling [†] Estimate

	 	3.9.1
	Rolling Forecast

	 	3.9.2
	Stability Lot Price

	 	3.7
	Submission

	 	10.4
	Supply Period

	 	10.4
	[†]

	 	10.6.2
	Term

	 	10.1






     2. COMMERCIAL SUPPLY



     2.1 Processing of Product. Omeros hereby engages Hospira, and Hospira hereby agrees, to
Process the Product for commercial sale by Omeros in accordance with the Specifications, and in
compliance with this Agreement and all Applicable Laws (including, without limitation, cGMPs). The
terms of this Agreement shall apply to the exclusion of and shall supersede the terms of any
purchase order, acknowledgement, confirmation, shipping document, or other document.



     2.2 Materials and Equipment. Unless otherwise agreed by the Parties in writing, Hospira shall
supply all Materials and standard processing and manufacturing equipment needed for Processing of
Product in accordance with this Agreement and the Specifications, at its sole cost and expense
(including, without limitation, shipping costs in connection with such Materials and equipment).



     2.2.1 Non-Standard Equipment. If dedicated or specialized equipment is required to Process
Product for Omeros, Hospira shall specify such equipment to Omeros in writing and, if Omeros agrees
in writing that such equipment is required, Omeros shall reimburse Hospira for





 




			
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the cost of
purchasing such equipment, on a pass-through basis, as well as the reasonable cost of installation
and validation of such equipment, all subject to Omeros’ prior written approval or a separate
written agreement between the Parties with respect to such equipment purchase, installation and
validation. Title to such equipment shall be in Omeros’ name and, at Omeros’ request and
reasonable expense, shall be returned to Omeros or discarded upon termination of this Agreement.
If Hospira wishes to use such equipment for Processing of a product other than Product for Omeros,
Hospira and Omeros shall meet and discuss the technical and practical ramifications of such use and
appropriate compensation to Omeros, but in no event is Omeros obligated to allow the use of such
equipment for the manufacture of such other product. These provisions shall not apply to any
non-dedicated or non-specialized equipment normally used or required for the manufacture of
pharmaceutical products, or to additional non-dedicated or non-specialized equipment required to
increase production capacity or efficiency at Hospira’s Facility.




     2.2.2 Labeling. Hospira shall label Product in accordance with Omeros’ instructions. Label
copy may be modified from time to time by written agreement of the Parties. Omeros shall reimburse
Hospira for Hospira’s actual costs of making any label copy changes and for the cost of any
labeling that Hospira is unable to use due to such label copy changes.



     2.3 Omeros’ Responsibilities and Authority. Unless otherwise agreed by the Parties in
writing, Omeros agrees that it will (a) provide APIs for processing of Product in accordance with
the provisions of Section 2.6,; (b) provide appropriate scientific data regarding the Product,
including, without limitation, appropriate and available safety and toxicity data, test methods and
formulation, fill and finish of the Product (as applicable); (c) provide Hospira with commercially
appropriate information necessary to Process the Product; (d) prepare and/or review and, if
acceptable to Omeros, approve all Specifications; and (e) as applicable, prepare all submissions to
Regulatory Authorities, portions of such that are relevant to Hospira which shall be subject to
review by Hospira as set forth in Section 5.8. Other than Processing of Product by Hospira in
accordance with this Agreement, Omeros shall retain sole authority and responsibility in all
matters related to commercialization of the Product.



     2.4 Specifications/Amendments/Changes.



     2.4.1 Specifications. The Master Batch Record and the Specifications shall be prepared and
maintained in Hospira’s standard format by Hospira, using Omeros’ master formula, other technical
information or standards that may be provided by Omeros, technical support provided by Omeros, and
labeling criteria (if applicable) provided by Omeros, and shall be approved in writing by Omeros.



     2.4.2 Changes to Specifications. Except as set forth in Section 2.4.3 below, if either Party
requests a change to the Specifications, Hospira shall provide Omeros with cost estimates for the
additional or repeat work related to such changes. If Omeros approves in writing such
additional or repeat work, Omeros shall be responsible for paying such costs if the changes
are specific to the Product, but not for regulatory mandated or plant upgrade changes that are
required for products in addition to the Product (which shall be approved pursuant to Section
2.4.3). If Omeros approves such estimated costs, Hospira shall perform such work, and Omeros





 




			
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shall
pay Hospira’s reasonable costs for such work within thirty (30) days of completion of such work;
provided that Hospira shall promptly notify Omeros in writing that such work has been completed.
Reimbursement for such additional work or repeat work shall be at the rate of [†].




     2.4.3 Regulatory Mandated Change to Specifications. If there is a change in Applicable Laws
that would necessitate a change in the Specifications, Processing or the means or methods of
performance under this Agreement by Hospira, the Parties will meet and confer in good faith to
determine whether and what changes (if any) should be made thereto and/or to the respective
responsibilities of the Parties therefor. Promptly after a request is made by Omeros for any such
change, or the Parties become aware of the change in Applicable Laws necessitating such change,
Hospira shall notify Omeros of any anticipated increase and/or decrease in the Price and any costs,
expenses or fees associated with such change. Omeros shall have the right to approve such change
and, if approved, the right to approve any corresponding revised Price and any reasonable costs,
expenses or fees associated with such change. No change in the Specifications, Product-specific
manufacturing processes, test methods, or other documentation or procedures relating to Processing
of Product or the Services shall be implemented by Hospira, whether initiated by Omeros or
requested or required by any Regulatory Authority, unless and until the Parties have executed a
written agreement documenting such change (“Change Order”), including the implementation date of
such change and any increase or decrease to the Price to reflect costs, expenses, fees or savings
associated with such change. If a Change Order is caused by a change clearly mandated or required
by any Regulatory Authority then approval of such Change Order shall not be withheld.



     2.4.4 Increases in Price. [†].



     2.5 Meetings; Communications. The Parties shall hold team meetings via teleconference,
videoconference or in person on a regular and periodic basis. Each Party shall appoint a
representative (each a “Representative”) who will have primary responsibility for day-to-day
interactions with the other Party’s Representative concerning the Processing of Product, the
Services and the activities of the Parties in connection with this Agreement. Unless otherwise
mutually agreed by the Parties in writing, all communications between Hospira and Omeros regarding
the Processing of Product, the Services and the activities of the Parties in connection with this
Agreement shall be addressed to or routed directly through (as appropriate) the respective
Representatives of each Party. Hospira shall provide periodic updates to Omeros regarding the
Processing of Product. These updates may be delivered by Hospira verbally, by telephone or
videoconference, or in writing, as mutually agreed upon by the Parties. Hospira shall notify
Omeros as soon as practicable (but in any event within twenty-four (24) hours) of any event or
condition, including without limitation technical deviations as addressed in Subsection 5.6 that is
likely to detrimentally impact or limit Hospira’s performance of the Services or Processing of
Product. Hospira shall notify Omeros as soon as practicable (but in
any event within four (4) business days) of any financial, legal or business condition that is
likely to detrimentally impact or limit Hospira’s performance of the Services or Processing of
Product.



     2.6. Supply and Processing of Commercial Product; APIs.





 




			
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2.6.1 Commercial Product Supply; Minimum Percentage; Hospira Obligations Regarding Processing and
Services. Pursuant to the terms and conditions of this Agreement, Omeros engages Hospira to
supply, and Hospira agrees to manufacture, deliver and sell to Omeros, Product intended for
commercial sale. Hospira shall be obligated to supply, and Omeros shall be obligated to purchase
and take delivery of, the Minimum Percentage of Omeros’ Product Requirements during the Term, which
shall initially be [†] as set forth in Section 1.22. At any time during the Term, Omeros and
Hospira may mutually agree in writing to have Hospira supply and Omeros purchase a percentage of
Omeros’ Product Requirements that is greater than the initial Minimum Percentage as provided for in
Section 1.22. Hospira shall Process Product and perform all other services (including Services)
agreed upon by the Parties: (a) in accordance with the Specifications; (b) in accordance with the
Applicable Laws including, without limitation, cGMPs; and (c) in compliance with this Agreement.




     2.6.2 Active Pharmaceutical Ingredient Supply. Hospira shall manufacture Product for Omeros
from APIs that Omeros shall supply at no cost to Hospira. Omeros shall supply APIs to Hospira in
quantities sufficient to satisfy Hospira’s gross manufacturing requirements of Product for Omeros.
Hospira’s use of APIs received from Omeros shall be limited to Processing of Product for Omeros as
contemplated by this Agreement. Omeros shall deliver or cause to be delivered APIs D.D.P.
(Incoterms 2000) Hospira’s designated Facility pursuant to no-cost purchase orders that Hospira
issues to Omeros. Within thirty (30) days of Hospira’s receipt of any APIs supplied by Omeros
hereunder, Hospira shall (a) perform identification, bacterial endotoxin and microbial limit
testing on the APIs and confirm the shipment quantity, and (b) notify Omeros of any inaccuracies
with respect to quantity or of any claim that any portion of the shipment fails the identification
test. In the event Hospira notifies Omeros of any deficiency in quantity of APIs received, Omeros
shall use reasonable commercial efforts to promptly ship to Hospira, at its own expense, the
quantity of APIs necessary to fulfill the original APIs shipment, unless Hospira and Omeros
mutually agree to a reduction in Product quantity to be Processed in accordance with Section
3.10.2. Hospira recognizes that the APIs will be procured by Omeros from third parties. In the
event that Omeros is unable to make up any shortage of APIs, Hospira shall be excused from any
resulting delay in the Processing of Product but Omeros shall be bound to any firm Purchase Orders
which have been accepted by Hospira, to be completed once API becomes available. In the event
Hospira notifies Omeros that the APIs shipment does not conform to the Specifications, Omeros shall
have the right to confirm such findings at Hospira’s manufacturing location. If Omeros determines
that such shipment of APIs conformed to the Specifications, the parties shall submit samples of
such shipment to a mutually acceptable independent laboratory for testing. If such independent
laboratory determines that the shipment conformed to the Specifications, Hospira shall bear all
expenses of shipping and testing such shipment samples. If Omeros or such independent laboratory
confirms that such shipment did not meet the Specifications, Omeros shall replace, at no cost to
Hospira, the portion of the APIs
which does not conform to the Specifications and bear all expenses of shipping and testing the
shipment samples.



     2.6.3 API Title. Omeros shall retain title to the APIs while in Hospira’s possession and
Hospira shall assume all responsibility and risk for the safekeeping, storage and handling of APIs
delivered hereunder and accepted by Hospira.





 




			
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     2.6.4 Replacement of API. If, due to any negligent act or omission or willful misconduct on
Hospira’s part in the examination of APIs supplied by Omeros, Product Processed hereunder fails to
conform with the Product Specifications, Hospira’s sole liability in such case shall be limited to
replacement of non-conforming Product, at no additional cost to Omeros, with conforming Product
using APIs that Hospira shall purchase from Omeros at [†]. If APIs are lost or destroyed in
connection with the Processing of Product by Hospira, Hospira’s sole liability in such case, [†],
shall be limited to replacement of such APIs with APIs that Hospira shall purchase from Omeros at
[†].



     2.6.5 API Reimbursement. [†]



     3. DELIVERY; PRODUCT ACCEPTANCE/REJECTION; FORECASTING; PAYMENT



     3.1 Delivery of Product. Omeros will arrange the transportation of Product with Omeros
approved carriers. Hospira shall provide product together with corresponding Certificates of
Analysis in accordance with the shipping and packaging instructions set forth in the Specifications
or otherwise provided in advance by Omeros and agreed to by Hospira (including any special
packaging or shipping conditions or labeling requirements), on or before the date(s) specified for
delivery in any Purchase Order. Delivery by Hospira shall be made FOB origin (U.S.) or FCA
Hospira’s facility (international) (Incoterms 2000) at the designated location(s) specified by
Hospira. All freight, handling, insurance, duties, taxes and shipping expense will be borne by
Omeros. Title to Product shall pass to Omeros upon delivery of Product to the carrier selected by
Omeros. Hospira shall be responsible for providing all quality and commercial shipping
documentation as set forth in the Specifications or as otherwise required under Applicable Laws or
by agreement of the Parties. At no additional expense to Omeros for assistance, Hospira will
cooperate with Omeros and Omeros’ carrier to arrange for transportation of Product at Omeros’
expense from the Facility to the destination(s) specified by Omeros. Risk of loss or damage to
Product and responsibility to insure shall pass to Omeros upon delivery to Omeros on Hospira’s
dock.



     3.2 Quality Control; Certificates. Hospira shall perform quality control tests to ensure that
each Batch is produced in accordance with Applicable Laws, including cGMP, and conforms to the
Specifications. All quality control test results and copies thereof shall be made available to
Omeros upon written request of Omeros. A separate quality agreement between Hospira and Omeros
(“Quality Agreement”) will be signed prior to cGMP production of the Product, so that Omeros and
Hospira may set forth certain quality responsibilities of the Parties as they relate to the
Processing of Product in connection with this Agreement. In the event of any conflict between the
Quality Agreement and this Agreement, the terms of this Agreement
shall control. Any testing performed by or on behalf of Hospira (including tests to confirm
that each Batch meets the Specifications), which shall be performed at Hospira’s sole cost and
expense, may be used by Omeros for final release of each Batch without additional testing by
Omeros. Notwithstanding the foregoing, Omeros may conduct its own release testing of each Batch,
and in accordance with Subsection 3.3 shall determine whether such Batch is conforming. Omeros (in
its sole discretion) shall determine the form and substance of any release testing information that
is submitted to a Regulatory Authority(ies). At the time of Delivery of each





 




			
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Batch, Hospira shall
send to Omeros a signed Certificate of Analysis with respect to such Batch and a signed Certificate
of Compliance (which may be included in the Certificate of Analysis). Upon Omeros’ request, within
thirty (30) days following the Delivery of each Batch, Hospira shall provide Omeros with properly
completed copies of Batch Records for such Batch prepared in accordance with the Specifications and
Applicable Laws, unless otherwise set forth in the Quality Agreement. Omeros shall be responsible
for all shipment validation and quality control.




     3.3 Inspection; Acceptance or Rejection. All Product Processed pursuant to this Agreement
shall be received by Omeros subject to Omeros’ right to conduct inspections and performance testing
of such Product. Omeros or its designee shall examine Product Delivered hereunder promptly after
actual receipt thereof by Omeros or its designee utilizing such methodology as Omeros shall
implement from time to time in its sole discretion.



     3.3.1 Rejection. Omeros shall have thirty (30) days from the date of actual receipt by Omeros
or its designee of each shipment of Product from Hospira in which to evaluate and accept or reject
such shipment of Product. Omeros shall be permitted to reject any shipment of Product as
non-conforming if (a) Hospira fails to timely provide an accurate Certificate of Analysis and/or
truthful Certificate of Compliance, (b) Product does not meet the Specifications, or (c) Product
was not Processed in accordance with Applicable Laws, including cGMP. If Omeros does not notify
Hospira in writing of Omeros’ rejection of such shipment of Product within thirty (30) days from
the date of receipt thereof by Omeros or its designee, Omeros shall be deemed to have accepted such
shipment of Product, except that Omeros shall retain the right to revoke acceptance of Product for
a Latent Defect pursuant to Section 3.3.3.



     3.3.2 Product Quantity. If the quantity of Product produced in any Batch fails to meet the
quantity specified in the applicable Purchase Order, then the Parties shall meet to discuss in good
faith one or more possible remedies to resolve the shortage.



     3.3.3 Latent Defect. If, after Omeros’ acceptance or deemed acceptance of a shipment of
Product, Omeros discovers a Latent Defect, Omeros shall notify Hospira within thirty (30) days
after such discovery of the Latent Defect, and Omeros shall have the right to revoke acceptance of
such shipment of Product by notifying Hospira thereof in writing. Upon such notice, such shipment
of Product shall be deemed rejected hereunder and the terms of Subsections 3.3.4 and 3.4 shall
apply.



     3.3.4 Disagreement Regarding Non-Conformity. In the event Omeros rejects a shipment of
Product for non-conformance in accordance with Subsection 3.3.1 or revokes acceptance of a shipment
of Product under Subsection 3.3.3, Hospira shall have the right within
thirty (30) days thereafter to sample and re-test such shipment of Product. If Hospira (a)
agrees that such shipment of Product is non-conforming, then the terms of Subsection 3.4 shall
apply, or (b) disagrees with Omeros’ determination that such shipment of Product is non-conforming,
Hospira shall so notify Omeros in writing within such thirty (30) day period. If Hospira disagrees
with Omeros’ determination that Product is non-conforming, then Hospira and Omeros shall cause an
outside testing laboratory or consultant agreeable to both of them to perform comparative tests
and/or analyses on samples of the alleged non-conforming Product. The testing laboratory’s or
consultant’s results shall be in writing and shall be final and binding, save





 




			
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for manifest error on
the face of its report. Unless otherwise agreed to by Hospira and Omeros in writing, the costs
associated with such testing and review shall be borne by the Party against whom the outside
testing laboratory or consultant rules. The outside testing laboratory or consultant shall be
required to enter into written undertakings of confidentiality no less burdensome than those set
forth herein. Hospira shall furnish the outside testing laboratory or consultant such instructions
regarding the storage, handling and potential hazards of any Product as are provided to or
developed by Hospira by or on behalf of Omeros.




     3.4 Remedies for Non Conforming Product. In the event that Hospira agrees that a shipment of
Product is non-conforming, or if the outside testing laboratory or consultant determines that such
Product is non-conforming, then, at Omeros’ election, Hospira shall [†]. Upon Hospira’s
instructions, Omeros shall destroy or return, at Hospira’s cost, the non-conforming Product.



     3.5 Custody of Omeros Property. In connection with this Agreement, the Parties agree that
Hospira will have custody over certain Omeros Property. It is understood that such Omeros
Property, to the extent practicable, will be clearly labeled by Hospira as belonging to Omeros, and
that Hospira shall bear the risk of loss for any Omeros Property during the time that such Omeros
Property is in the possession of Hospira. Title to Omeros Property shall at all times remain in
Omeros or its assigns, and Hospira shall not pledge to any third party a security or other interest
in the Omeros Property, nor shall Hospira allow the Omeros Property to be otherwise encumbered.
Hospira shall at all times employ the measures specified by Omeros, and take such measures as are
otherwise reasonably required, to protect Omeros Property from risk of loss or damage at all stages
of Processing the Product and the Services hereunder. Hospira shall immediately notify Omeros if
at any time it believes any Omeros Property has been damaged, lost or stolen. Hospira shall not
use any Omeros Property for any purpose other than performing its obligations under this Agreement.
Upon any request by Omeros, Hospira shall immediately return to Omeros all Omeros Property,
including all copies thereof, in conformance with any directions provided by Omeros therefore,
except that Hospira shall retain reserve samples of Product as provided in Subsection 3.6.



     3.6 Retention Samples; Storage. Hospira shall retain and store, in accordance with the
Specifications, samples of each Batch of Product at the Facility at no cost to Omeros until the
date that is thirteen (13) months after the expiration date of each such Batch (or for such longer
period as may be required by applicable Regulatory Authorities or Applicable Laws). Thereafter, if
requested by Omeros, Hospira and Omeros shall negotiate in good faith and enter into a contract for
continued storage of such Product samples, at Omeros’ reasonable cost and
expense; provided, however, that at any time following the initial storage period set forth
above, if Hospira decides that it will no longer store such samples or Omeros decides it does not
wish to continue to have Hospira store such samples, such Party shall provide no less than sixty
(60) days’ written notice to the other Party, during which time Omeros will instruct Hospira to
either return such samples to Omeros or a third party designated by Omeros, or to destroy such
samples. Hospira shall comply with such instructions from Omeros, provided that Omeros shall
reimburse Hospira its reasonable out-of-pocket costs incurred in returning or destroying such
samples.





 




			
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     3.7 Marketed Product Stability Samples. Hospira shall, in accordance with SOPs, pull
stability samples of Product and either (a) retain, store and test such stability samples in
accordance with the Specifications, or (b) ship such stability samples to Omeros or a third party
designated by Omeros in accordance with the Specifications. Hospira shall provide Omeros at least
sixty (60) days advance written notice prior to disposition of any stability samples after
specified storage times have elapsed, and Omeros shall provide instructions on disposal, continued
storage or shipment of such samples at Omeros’ reasonable expense. Upon Omeros’ written request,
Hospira shall provide stability testing of the Product in accordance with ICH guidance at a total
cost of [†] (the “Stability Lot Price”) put up on stability testing in accordance with a time point
matrix to be mutually agreed in writing and, upon such agreement, appended and incorporated into
this Agreement as Exhibit C.. The Stability Lot Price shall be invoiced on a pro-rata basis for
each stability time point completed. The Stability Lot Price is based on an assumed shelf life of
[†], and should the shelf life increase or decrease the Stability Lot Price shall be adjusted
proportionately.



     3.8 Price; Adjustments; Payment



     3.8.1 Initial Product Pricing. Hospira shall invoice Omeros upon shipment of Product by
Hospira, at the Price [†] of Product set forth in Exhibit B of this Agreement.



     3.8.2 Price Adjustments. [†].



     3.8.3 Payment Terms. [†]. Omeros shall make payment of any undisputed portion of such
invoices within [†] after Omeros’ receipt of each such invoice, unless otherwise specifically set
forth in this Agreement. If Omeros should default on any undisputed, due and owing payment,
interest shall accrue on any undisputed amount that is overdue at the rate of [†] per month or the
maximum rate allowed by law, whichever is lower.



     3.9 Product Forecasts.



     3.9.1 Rolling [†] Estimate. No later than [†], Omeros shall provide Hospira with a written
estimate of Omeros’ [†] quantity of commercial Product that represents the Minimum Percentage of
Omeros’ Product Requirements for the first [†] of the Term, such estimate to be used by Hospira
solely for [†] planning purposes. Omeros shall not incur any liabilities if such estimate is not
met. If Hospira notifies Omeros (and such notification shall be provided to Omeros in writing)
that it will be unable to supply Product in accordance with Omeros’ estimate, Omeros shall have the
right, in its sole discretion, [†]. Thereafter, by [†] Omeros shall update
such rolling [†] estimate (“Rolling [†] Estimate”) for the period commencing on [†]. Upon
receipt of each Rolling [†] Estimate, Hospira shall, within [†] days after such receipt, provide
Omeros a written (a) acceptance of such estimate (and in such event, Hospira shall plan to allocate
its capacity in a manner consistent with such Rolling [†] Estimate), or (b) rejection of such
estimate. In the event Hospira rejects any updated Rolling [†] Estimate, Hospira and Omeros shall
meet as soon as possible to discuss in good faith the quantities of Product that Hospira would have
capacity to provide to Omeros during [†] covered by the Rolling [†] Estimate, and any amount agreed
to shall be memorialized by the Parties in writing in a revised Rolling [†] Estimate. In such
event and in Omeros’ discretion, Omeros shall have the right to [†].





 




			
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     3.9.2 Notification and Rolling Forecast. Omeros will provide Hospira with written notice when
a new drug application (“NDA”) to market Product is submitted to FDA. Hospira and Omeros will
cooperate in scheduling and estimating initial commercial Batches of the Product. On or before the
first (1st) day of each calendar month, beginning at least [†] prior to the anticipated
date of commencement of commercial manufacture (excluding process validation batches), Omeros shall
provide to Hospira an [†] rolling forecast of the quantities of Product that Omeros intends to
order from Hospira during such period (“Rolling Forecast”). The first [†] of such Rolling Forecast
shall constitute a binding order of Omeros and a supply commitment of Hospira for the quantities of
Product specified therein (“Firm Commitment”), and the following [†] of the Rolling Forecast shall
be a good faith estimate, the [†] of such [†] period which is binding to the extent set forth in
the Supply and Purchase Commitment described in Section 3.10.4 below.



     3.10 Purchase Orders; Supply and Purchase Commitment.



     3.10.1 Purchase Orders. On or before the first (1st) day of each calendar month,
Omeros shall submit a purchase order (each a “Purchase Order”) to Hospira covering Omeros’
purchases of Product pursuant to the [†] of the Firm Commitment that is effective as of such first
day, and shall specify the Delivery dates for the Product included in such Purchase Order. Hospira
will use commercially reasonable good faith efforts to accept and meet the Delivery date specified
by Omeros in the Purchase Order. Omeros shall not, without the written consent of Hospira,
designate a Product Delivery date in a Purchase Order that is earlier than [†]calendar days from
the date on which Omeros submits the Purchase Order. For each Purchase Order, Hospira shall
provide (a) a confirmation of acceptance of the Purchase Order based on the Product Delivery date
specified by Omeros, or (b) a proposed modification of the Purchase Order offering to accept the
Purchase Order based on an alternate Product Delivery date. Upon (a) Omeros’ receipt of Hospira’s
confirmation of acceptance of the unchanged Purchase Order, or (b) Hospira’s receipt of Omeros’
written confirmation accepting the modified Purchase Order with the alternate Product Delivery
date, such Purchase Order shall become a “Firm Purchase Order.” If Hospira subsequently finds that
it is unable to meet the specified Product Delivery date for a Firm Purchase Order, Hospira shall
promptly notify Omeros and provide to Omeros an alternative Product Delivery date (which shall not
be more than fifteen (15) calendar days later than the initial Product Delivery date designated in
the Firm Purchase Order).



     3.10.2 Purchase Order Changes. In the event that Omeros requests any change to the Delivery
date set forth in a Firm Purchase Order, Hospira shall attempt to accommodate the Delivery date
change within reasonable manufacturing capabilities and efficiencies. [†]. Hospira shall also
advise Omeros of the reasonable costs associated with making any such Delivery date change (if
any), and Omeros shall be deemed to have accepted the obligation to pay Hospira for such
associated, reasonable costs if Omeros indicates in writing to Hospira that Hospira should proceed
to make the change. Hospira shall charge Omeros the amount agreed upon in writing by Omeros for
making any such Delivery date change. If Omeros cancels a Firm Purchase Order, Hospira shall be
relieved of its obligation relating to such order, but Omeros will not be relieved of its
obligation of payment unless Hospira agrees to such cancellation in writing [†]. Subject to
Hospira’s compliance with the terms of Section 2.6.4, if Omeros (a) does not supply sufficient API
to Process Product in accordance with a given Firm Purchase Order, or (b) acts in any other





 




			
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manner,
not including any change requested by Omeros due to changes in regulatory or other Applicable Law
or to ensure that the Product meets the Specifications, to directly and effectively interfere with
Hospira’s ability to perform in accordance with a given Firm Purchase, Omeros shall remain liable
for the full amount of the Firm Purchase Order, regardless of whether such Product is Processed by
Hospira or whether Omeros takes Delivery of any such Processed Product [†]. Notwithstanding the
foregoing, Hospira shall use its commercially reasonable efforts to supply Omeros with quantities
of Product which are in excess of the quantities specified in a Firm Purchase Order, subject to
Hospira’s other supply commitments and manufacturing and equipment capacity.




     3.10.3 Agreement Controls. In the event of a conflict between the terms of any Firm Purchase
Order and this Agreement, this Agreement shall control.



     3.10.4 Supply and Purchase Commitment. Hospira shall supply Omeros with the quantity of
Product ordered by Omeros in each Firm Purchase Order, unless the quantity of Product ordered for
any calendar quarter exceeds [†] thereafter, in which event Hospira shall use commercially
reasonable efforts to supply quantities in excess of these amounts.



     3.10.5 Purchase Commitment. Following completion of the first [†] of the Initial Term, Omeros
covenants to purchase from Hospira not less than [†] of the Rolling Forecast during the [†] of the
Initial Term thereafter (the “Minimum Purchase Requirement”). Omeros may shift any portion of its
Firm Commitment to the [†] of the Rolling Forecast so long as its Minimum Purchase Requirement is
met. In lieu of Omeros taking Delivery of each such [†] Minimum Purchase Requirements of Product,
Omeros shall have the option, to be exercised in writing if elected by Omeros, to pay for its
Minimum Purchase Requirement at the Price set forth in Exhibit B and waive Hospira’s
Processing and Delivery obligations for the corresponding amount of Product. In the latter event,
Hospira shall invoice Omeros for the amount payable to meet the Minimum Purchase Requirement, and
Omeros shall pay Hospira such amount within [†] after receipt of Hospira’s invoice.



     3.10.6 Failure/Inability to Supply.


(a) At Least [†]. If Hospira fails to, or is unable to, supply Omeros with at least [†]
of the quantity of Product ordered by Omeros pursuant to the greater of (i) all Firm Purchase
Orders received during [†], or (ii) Omeros’ Firm Commitment for any [†] period, then the Minimum
Percentage of Omeros’ Product Requirements would, at Omeros’ sole discretion, be decreased by [†].



(b) At Least [†]. If Hospira fails to, or is unable to, supply Omeros with at least [†]
of the quantity of Product ordered by Omeros pursuant to the greater of (i) all Firm Purchase
Orders received during [†], or (ii) Omeros’ Firm Commitment for any [†], then promptly thereafter
Hospira’s and Omeros’ senior executives shall meet to develop a corrective action plan and/or
remedy. If such mutually acceptable corrective action plan and/or remedy is not developed and
mutually agreed [†] after the first meeting of such executives, then Omeros shall have the right,
in its sole discretion, to either [†] (ii) require Hospira to qualify another Hospira site at
Hospira’s sole cost; or (iii) terminate this Agreement.






 




			
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     3.11 Rework. Hospira will not rework or reprocess Product unless authorized in advance by
Omeros in writing and there is a validated process for such rework or reprocessing of Product.
Re-inspection does not constitute rework or reprocessing.



     3.12 Product Recalls. In the event that any Product is recalled due to (a) the request,
directive or order of any Regulatory Authority or other national government authority, (b) the
order of a court of competent jurisdiction, or (c) a voluntary recall instituted by Omeros, Omeros
shall coordinate such recall, and the Parties shall take all appropriate actions to carry out such
recall and shall cooperate with any governmental investigations surrounding such recall. The cost
of any such recall shall be borne by Hospira if the recall results from the failure of the Product
to meet Specifications or Hospira’s breach of this Agreement, including, without limitation, breach
of Hospira’s warranties under Section 4.1 of this Agreement [†]. Further, Hospira shall at
Hospira’s expense, replace any recalled Batches and shall purchase replacement APIs or other
Materials from Omeros for such replacement Product at Omeros purchase cost/kg as set forth in
Section 2.6.3; [†]. The cost of any other recall shall be borne exclusively by Omeros. For purposes
of this Agreement, recall expenses shall include, without limitation, the expenses of notification
and destruction or return of the recalled Product, cost of the recalled Product, and any costs
associated with the APIs and other Materials for and Processing and distribution of replacement
Product, but shall not include lost profits of either Party.



     3.13 Hazardous Waste. Hospira shall be responsible for destruction of any and all hazardous
waste, including, without limitation, rejected or recalled Product, rejected, excess or unsuitable
APIs or other Materials, remainder, residue and refuse, subject first to completion of any
retention periods and activities specified in this Agreement, in accordance with the Applicable
Laws. Omeros shall bear the expense of destruction of hazardous waste, except for any hazardous
waste resulting from Hospira’s breach of this Agreement, including, without limitation, breach of
any warranty under Section 4.1 herein, for which hazardous waste Hospira shall bear the expense.



     3.14 Cold Storage Fee. A cold storage fee shall be due and payable to Hospira if Omeros
stores Product at Hospira’s plant for longer than thirty (30) days after Product’s final release.
The fee shall be [†] or any part thereof.



     3.15 Shipments per Batch. Hospira shall make [†] shipments to Omeros of Product per Batch at
no charge to Omeros. Any additional shipments of Product per Batch requested shall be at a fee of
[†] per shipment plus shipping costs.



     4. REPRESENTATIONS AND WARRANTIES



     4.1 Hospira Representations and Warranties. Hospira represents and warrants that: (a) it has
the full power, right and authority to execute and deliver this Agreement; (b) it shall use
commercially reasonable best efforts to perform its obligations hereunder; (c) it will assign
professional personnel, qualified to perform the Services in a manner consistent with the technical
requirements of the Processing of Product; (d) none of its officers, directors, employees,
Affiliates, contractors or agents has been debarred or, to Hospira’s knowledge, threatened with
debarment under the Generic Drug Enforcement Act or convicted of a crime which could lead to
debarment, and it has not utilized, and will not utilize, the services of any





 




			
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individual or entity
in the performance of any Services that has been debarred or threatened with debarment under the
Generic Drug Enforcement Act, convicted of a crime that could lead to debarment or subject to any
other penalty or sanction by the FDA; (e) it will conduct the Services in conformity with
Applicable Laws including applicable cGMP, the procedures and parameters set forth in the
Specifications, and generally accepted professional standards, and the event of any conflicts
between the foregoing requirements, the most stringent requirement shall be met so long as
consistent with all Applicable Laws; (f) each Certificate of Analysis will reflect the results of
the tests conducted on the Batch of Product to which it relates, each Certificate of Compliance
will be accurate and true, and the Batch Records delivered to Omeros will accurately reflect in all
material respects the processes and procedures followed by Hospira in Processing Product as set
forth in the Specifications; (g) the Product shall not have been and shall not be adulterated,
misbranded, misused, contaminated, tampered with or otherwise altered, mishandled while in the
custody and control of Hospira; and (h) it will not transfer to any third party any Product, other
than (i) for the purpose of tests at any outside testing laboratory or consultant, as provided
under Subsection 3.3.4, (ii) to Omeros’ designee or (iii) to any subcontractor approved in
accordance with Subsection 6.1. In the event that Hospira receives notice of the debarment or
threatened debarment of any individual or entity utilized by Hospira in connection with the
Product, Hospira shall notify Omeros in writing immediately, and Omeros shall have the right to
terminate this Agreement upon written notice without further cost or liability, except for payments
of accrued and unpaid obligations to the date of termination. Hospira further represents and
warrants that it has obtained (or will obtain prior to Processing Product or performance of other
Services), and will remain in compliance with during the term of this Agreement, all permits,
licenses and other authorizations which are required under Applicable Laws for the Processing of
Product or performance of other Services hereunder.




     4.2 Mutual Representations and Warranties. Each Party hereby represents and warrants to the
other Party that: (a) the person executing this Agreement is authorized to execute
this Agreement; (b) this Agreement is legal and valid and the obligations binding upon such
Party are enforceable by their terms; and (c) the execution, delivery and performance of this
Agreement does not conflict with any agreement, instrument or understanding, oral or written, to
which such Party may be bound, nor violate any law or regulation of any court, governmental body or
administrative or other agency having jurisdiction over it.



     4.3 Omeros Representations and Warranties. Omeros represents and warrants:
(a) if Omeros supplies APIs to Hospira for use in Processing the Product, then all such
Omeros’ supplied API at the time of delivery to Hospira shall be in conformity with the applicable
Specifications and shall not be adulterated or misbranded within the meaning of the Act; (b)
Hospira’s Processing of Product and performance of the Services pursuant to the Specifications will
not, to Omeros’ knowledge, violate any third party proprietary right; and (c) Omeros will not sell
Product into any jurisdiction unless and until Omeros receives any necessary Regulatory Authority
approvals.



     5. RECORDS; REGULATORY MATTERS



     5.1 Technical Records. Hospira shall maintain complete, true and accurate Technical Records
in accordance with Applicable Laws and as is reasonably necessary to





 




			
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support Omeros’ regulatory filings with respect to Product. Hospira shall store all Technical
Records for the longer of a period of at least [†] from the relevant Product manufacturing date or
the period required under Applicable Laws, after which Hospira may dispose of the Technical Records
or return the Technical Records (excluding General SOPs and any Confidential Information of
Hospira) to Omeros in accordance with Omeros’ express written instructions therefore. In the
absence of such instructions, Hospira shall notify Omeros in writing of its intent to dispose of
the Technical Records and request Omeros’ instructions as to their disposal. If Omeros does not
respond to such notice within sixty (60) days after receipt thereof, or in any event prior to the
later destruction of such records, Hospira may destroy such records at its discretion and expense.
Hospira shall, at any time upon Omeros’ written request and at Omeros’ reasonable expense, return
the Technical Records to Omeros or transfer the Technical Records to any third party designated by
Omeros.



     5.2 Drug Master File; Regulatory Filings. Hospira shall file and maintain the appropriate
drug master file (“DMF”) and related reference applications (e.g., site master file) in accordance
with the Applicable Laws in the Territory for its Processing of each Product under this Agreement,
at Hospira’s sole expense. Upon request by Omeros, Hospira shall make selected portions (including
all portions relevant to the Processing of the Product) of its DMF and related reference
applications, and all Technical Records available for inspection by authorized representatives of
the FDA and other Regulatory Authorities. At Omeros’ request and as agreed upon by Hospira,
Hospira shall prepare some or all sections of Omeros’ regulatory filings (including without
limitation chemistry, manufacturing and control sections) for a Product that pertain to Hospira’s
Processing activities hereunder, or at Omeros’ request shall assist Omeros in preparing such
sections; provided that Omeros shall compensate Hospira for its reasonable out-of-pocket costs and
expenses associated with such preparation activities. Hospira shall provide any additional
information, and otherwise cooperate as reasonably requested by Omeros, at Omeros’ reasonable cost
and expense, in support of any regulatory filings related to Product, including in the preparation
and maintenance of such regulatory filings, which regulatory filings shall be filed by Omeros at
its sole cost and expense in its sole discretion and shall be the sole and exclusive property of
Omeros.



     5.3 Communications with Regulatory Authorities. Omeros shall be solely responsible for all
contacts and communications with any Regulatory Authority with respect to all matters relating to
Product. At Omeros’ request and expense, Hospira shall make appropriate personnel reasonably
available for meetings with Regulatory Authorities related to Hospira’s Processing of Product or
other Services. Other than during an audit or inspection by any Regulatory Authority, Hospira
shall have no contact or communication with any Regulatory Authority regarding a Product or
regarding Hospira’s Processing activities or other Services related to Product without the prior
written consent of Omeros, which consent may be granted or withheld in Omeros’ sole discretion,
except as provided in Subsection 5.6 or as required by Applicable Law or a Regulatory Authority.
Hospira shall notify Omeros immediately, and in no event later than two (2) business days, after
receiving any contact or communication from any Regulatory Authority that in any way directly
relates to Product or Hospira’s Processing activities or other Services.





 




			
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     5.4 Compliance. Hospira shall comply in all material respects with all regulatory
requirements with respect to Product that are imposed upon Hospira (as the provider of Services
hereunder) by Applicable Law from time to time, including, but not limited to, those relating
to environmental, health, and safety matters. Omeros shall comply in all material respects with
all regulatory requirements with respect to Product that are imposed upon Omeros (as the holder of
any Investigational New Drug application or New Drug Application and any similar global
applications with respect to Product) by Applicable Law from time to time.



     5.5 Audits; Right of Access. Hospira shall permit Omeros personnel and authorized
representative(s), or shall ensure that Omeros personnel and authorized representative(s) shall be
entitled (a) to inspect, observe and audit the Processing of Product and other Services, the
Facility and any other locations at which Product may be Processed with Omeros’ consent, (b) to
examine the condition of the Materials, Omeros Property, and Product stored at the Facility, and
(c) to examine all Product Data, Technical Records and all other documentation related to this
Agreement, including, without limitation, maintenance logs for the purposes of ensuring compliance
with cGMP and Hospira’s trade secrets and other Confidential Information related to its
manufacturing processes to the extent relevant to the Processing of Product and/or other Services
performed by Hospira hereunder, not to exceed [†] (except “for cause” audits as set forth below in
this Subsection) during the term of this Agreement, subject to reasonable notice and prior approval
by Hospira, such approval not to be unreasonably withheld, during regular business hours, and for a
period not to exceed [†]; provided that such Omeros personnel and/or authorized representative(s)
shall be bound to obligations of confidentiality pursuant to this Agreement or pursuant to a
separate, executed confidentiality agreement that imposes an obligation of confidentiality no less
onerous than the obligation imposed pursuant to Section 8 of this Agreement. Notwithstanding these
limitations, Omeros personnel and/or representatives shall be entitled to observe the Processing of
Product and other Services at any time upon reasonable notice and for a reasonable duration during
regular business hours (including during any shift that is engaged in Processing of Product or
performance of other Services). Omeros shall be entitled to conduct “for cause” audits following
issuance of Form 483s or similar reports delivered by Regulatory Authorities to Hospira pertaining
to the Processing of Product, performance of other Services, or the occurrence of other events
which are likely to adversely affect the Processing of Product or other Services as frequently as
requested by Omeros at reasonable times and for reasonable duration (which may exceed [†] days)
until Hospira has corrected such deficiencies, subject to Hospira approval, such approval not to be
unreasonably withheld. Hospira shall audit its permitted subcontractors and suppliers for
compliance with the Specifications and Applicable Laws, including cGMP according to Hospira’s
standard subcontractor audit procedures, if the subcontractors are chosen by Hospira. Omeros shall
be responsible for audit of all subcontractors and suppliers that have been selected by Omeros in
lieu of subcontractors and suppliers recommended or routinely used by Hospira. During Omeros’
audits of the Facility, Omeros shall have the right to confirm Hospira’s compliance with Hospira’s
standard operating procedures for auditing subcontractors and suppliers for any Products Processed
or other Services performed under this Agreement.



     5.6 Regulatory Inspections. Hospira shall advise Omeros no later than the next day that is
not a Saturday, Sunday or federal or state holiday if an authorized agent of any Regulatory
Authority or any other regulatory body plans to visit the Facility, and makes an inquiry regarding





 




			
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Hospira’s Processing of Product or performance of other Services regarding any part of the Facility
that is used in Processing of Product or performance of other Services. Omeros shall
have the right to be present at any visit directly relating to the Product or otherwise with
Hospira’s approval, which approval shall not be unreasonably withheld, and to review in advance and
comment on any response to the communication or investigation submitted by Hospira (but no more
than [†] Omeros personnel shall be present during any such visit). Hospira shall cooperate fully
with Omeros in providing the information needed for any such communication. Hospira shall provide
to Omeros copies of any Form 483s or equivalent documents delivered by such Regulatory Authority or
regulatory body as a result of such visit, to the extent that the 483 or other document
specifically mentions Product. Portions of the 483 or other document not relating to Product will
be redacted.




     5.7 Product Complaints. Omeros shall maintain customer complaint and adverse event files in
accordance with Applicable Laws. Any such complaints received by Hospira shall be forwarded to
Omeros. Omeros shall be responsible for the review of the complaint or adverse event to determine
the need for an investigation or the need to report to the FDA, as required by Applicable Laws.
Omeros shall provide Hospira copies of all Product performance or manufacturing-related complaints
that relate directly to Processing of Product by Hospira and require investigation, as well as
copies of the results of such investigation. Hospira shall cooperate and assist Omeros in any such
investigations and shall fully report findings of any investigation it conducts to Omeros. Omeros
shall make specific complaint and adverse event files available for inspection, to the extent
required by any Regulatory Authority, during inspection of Hospira’s facilities.



     5.8 Hospira Right to Review. Hospira shall have the right to review and consult on those
portions of Omeros’ proposed regulatory submissions relating to Hospira’s Processing procedures
before any submissions are filed with appropriate Regulatory Authorities. Omeros shall use
commercially reasonable efforts to provide Hospira with no less than fifteen (15) business days to
review any such proposed regulatory submissions and Hospira will use commercially reasonable
efforts to expedite any review. Omeros shall provide copies and consult with Hospira and Hospira
may advise Omeros in responding to questions from the Regulatory Authorities regarding Omeros’
submission(s) for Product. Omeros shall provide to Hospira for its files a final copy of the
Chemistry, Manufacturing and Controls section of any such regulatory submission(s) related to
Hospira’s Processing.



     6. SUBCONTRACTORS



     6.1 Conditions. [†] Hospira shall be responsible, and shall remain liable, for the
performance of all of its obligations under this Agreement and for any breach by any subcontractor.
Omeros shall have the right to audit and inspect all subcontractors (including, without
limitation, all vendors and testing contractors) with whom Hospira may enter into agreements in the
performance of Services. Such audit and inspection rights shall be substantially similar to the
rights of Omeros to audit and inspect Hospira under this Agreement. Hospira shall ensure that all
agreements with such subcontractors include provisions to maintain the confidentiality of Omeros’
Confidential Information, and shall provide Omeros rights with





 




			
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respect to such subcontractors that
are substantially similar to the access rights granted to Omeros under Subsection 5.5 above.




     7. INTELLECTUAL PROPERTY



     7.1 Ownership of Intellectual Property. Except as expressly set forth in this Agreement or as
the Parties may otherwise agree in writing, each Party owns, and shall continue to own, its
existing Intellectual Property as of the Effective Date of this Agreement, and its Intellectual
Property developed, acquired or obtained by such Party after the Effective Date of this Agreement
independently of the other Party and the Services, without conferring any interest therein on the
other Party. All Joint New IP shall be jointly owned by Hospira and Omeros. All Hospira New IP
shall be owned solely by Hospira. Hospira shall grant to Omeros, and does hereby grant to Omeros,
a fully paid-up, royalty-free, worldwide, perpetual, exclusive license, including the right to
grant sublicenses, under all Hospira New IP and Hospira’s joint ownership interest in Joint New IP
that is necessary or beneficial for Omeros’ [†]. Hospira shall grant to Omeros, and does hereby
grant to Omeros, a fully paid-up, royalty-free, worldwide, perpetual, non-exclusive license,
including the right to grant sublicenses, under all Hospira New IP solely to the extent necessary
or beneficial for the purposes of making, having made, using, importing, offering for sale, and/or
selling Omeros’ pharmaceutical products other than Product and Equivalents. [†]. All Omeros New
IP shall be owned solely by Omeros. Hospira agrees to execute any assignment to confirm title to
any Intellectual Property in Omeros’ name consistent with the ownership of such Intellectual
Property as set forth in this Subsection, and to execute any other documents, including, without
limitation, any and all patent applications or other instruments and render such other assistance
to Omeros to apply for and prosecute patent or other proprietary protection in the United States or
any other country with respect to Omeros New IP, provided Omeros shall compensate Hospira for its
reasonable out of pocket costs and expenses and, for assistance other than executing documents,
Hospira’s standard hourly fees for such assistance. Hospira shall promptly notify Omeros in
writing of any and all Omeros New IP promptly after conception or reduction to practice thereof by
Hospira. The parties recognize that Hospira is in the business of developing, manufacturing, and
selling generic pharmaceutical products. Nothing in this provision is intended to prohibit Hospira
from independently developing, manufacturing, and/or selling any pharmaceutical product provided
that Hospira does not utilize, refer to, and/or rely upon any [†] in the development,
manufacturing, and/or sale of such product in contravention of the exclusive license granted to
Omeros herein. The preceding sentence does not in any way convey to Hospira any right or license
to Omeros’ Intellectual Property, including without limitation the New Omeros IP, or to Omeros’
Confidential Information, or limit Hospira’s obligations with respect to the same as provided in
this Agreement.



     7.2 License to Hospira. During the Term, Omeros hereby grants to Hospira a royalty-free,
non-exclusive license, without a right to sublicense, to use and exploit Intellectual Property
owned by or licensed to Omeros and used in connection with the Processing of Product, solely to the
extent necessary to Process Product for Omeros under the terms and conditions of this Agreement.





 




			
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     7.3 Product Data. All Product Data, including, without limitation, all Batch Records and
other Product-specific Technical Records generated or obtained by Hospira in connection with this
Agreement, and all Specifications, including, without limitation, Master Batch Records generated or
obtained by Hospira in connection with this Agreement, but excluding General
SOPs, shall be the sole and exclusive property of Omeros and shall be deemed to be Omeros’
Confidential Information. Upon expiration or termination of this Agreement or the earlier request
of Omeros, Hospira shall send to Omeros at Omeros’ sole and reasonable expense, complete copies of
all Product Data and Specifications in written and (where available) editable electronic form. The
Product Data shall be prepared, documented and communicated by Hospira in a manner consistent with
the Specifications or as otherwise instructed by Omeros.



     7.4 No Implied Right or License. Nothing contained in this Agreement shall be implied to
grant to either Party any right or license with respect to the other Party’s Intellectual Property
or Confidential Information of the other Party, except as specifically provided in this Agreement.



     8. CONFIDENTIALITY



     8.1 Confidential Information. Each Party agrees that the disclosing Party has and shall
retain sole and exclusive rights of ownership in all Confidential Information disclosed or owned by
such Party. Each Recipient agrees that during the term of this Agreement and for five (5) years
thereafter it will not use any Confidential Information of the disclosing Party except for the
purposes of performing under this Agreement, unless otherwise agreed by the Parties in writing.
Each Recipient agrees not to disclose any Confidential Information of the disclosing Party to
others (except to Recipient’s employees, consultants, professional advisors, agents and Affiliates
who reasonably require disclosure of such Confidential Information to achieve the purposes of this
Agreement and who are bound to the Recipient by like obligations as to confidentiality no less
stringent than those set forth herein) during the term of this Agreement and for five (5) years
thereafter without the prior written consent of the disclosing Party. Hospira agrees that with
respect to the Product Data, the Specifications and the Omeros New IP, which are included in
Omeros’ Confidential Information, these obligations of non-use and confidentiality shall subsist
beyond five years after the termination of this Agreement. Each Party agrees to maintain and
follow reasonable procedures to prevent unauthorized disclosure or use of the other Party’s
Confidential Information and to prevent it from becoming disclosed or being accessed by
unauthorized persons. Each Party agrees that it may disclose to authorized persons only such
Confidential Information of the disclosing Party as is necessary for each such authorized person to
perform its responsibilities under this Agreement. Recipient shall advise the disclosing Party of
any disclosure, loss, or use of Confidential Information of the disclosing Party in violation of
this Agreement as soon as practicable. Each Party agrees to return or destroy the Confidential
Information of the other Party, whether in written, graphic, electronic or other tangible form,
upon written request, provided, however, that legal counsel for each Party may retain an archival
copy of Confidential Information solely for purposes of ensuring compliance with this Agreement.



     8.2 Disclosure of this Agreement. The terms of this Agreement shall be considered each
Party’s Confidential Information, and accordingly except for disclosures expressly





 




			
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permitted under
this Agreement, neither Party may release any information to any third party regarding the terms of
this Agreement without the prior written consent of the other Party except as required by law or
regulation. Notwithstanding the foregoing, the terms of this Agreement may be disclosed by Omeros
to its existing or potential investors, acquirers, merger partners,
commercial partners, shareholders, directors and professional advisors as long as such parties
are subject to similar conditions of confidentiality.




     8.3 Permitted Disclosures. Notwithstanding anything to the contrary, a Party may disclose the
Confidential Information of the other Party only to the extent such disclosure is reasonably
necessary : (a) to secure patent protection for an Intellectual Property developed pursuant to this
Agreement consistent with the ownership set forth in Subsection 7.1; or (b) to comply with
Applicable Law, requirements of any Regulatory Authority or other regulatory or governmental
agency, including without limitation the FDA, the Securities and Exchange Commission, the Federal
Trade Commission and/or the Department of Justice, or judicial order from a court of competent
jurisdiction; or (c) in order to conduct pre-clinical or clinical trials or seek regulatory
approval to market Product. Prior to making any such permitted disclosures, however, the
disclosing Party shall give reasonable advance notice to other Party with as much detail as
possible in relation to the disclosure. Each Party agrees that it shall cooperate fully and in a
timely manner with the other Party with respect to all such permitted disclosures, including
determining what information should be released and requests for confidential treatment of
Confidential Information of either Party included in any such disclosure; provided that in no event
shall a Party be required to delay any filing or release unreasonably hereunder.



     8.4 Remedies. Because of the unique nature of the Confidential Information, each Recipient
acknowledges and agrees that the disclosing Party may suffer irreparable injury if the Recipient
fails to comply with the obligations set forth in this Section 8, and that monetary damages may be
inadequate to compensate the disclosing Party for such breach. Accordingly, each Recipient agrees
that the disclosing Party will, in addition to any other remedies available to it at law, in equity
or otherwise, without the requirement to post a bond, be entitled to seek injunctive relief and/or
specific performance to enforce the terms, or prevent or remedy the violation, of this Section 8.
This provision shall not constitute a waiver by either Party of any rights to damages or other
remedies which it may have pursuant to this Agreement or otherwise.



     9. NO WARRANTY; LIMITATION OF LIABILITY; INDEMNIFICATION; INSURANCE



     9.1 No Warranty; Limitation of Liability. EXCEPT AS EXPRESSLY SET FORTH HEREIN, EACH
PARTY DISCLAIMS ALL CONDITIONS, REPRESENTATIONS AND WARRANTIES, WHETHER EXPRESS, IMPLIED, STATUTORY
OR OTHERWISE, INCLUDING, WITHOUT LIMITATION, ANY IMPLIED WARRANTY OF MERCHANTABILITY OR FITNESS FOR
A PARTICULAR PURPOSE OTHER THAN THAT THE PRODUCT MEETS THE SPECIFICATIONS, OR ANY WARRANTY OF
NON-INFRINGEMENT OF THIRD PARTY RIGHTS. UNDER NO CIRCUMSTANCES SHALL EITHER PARTY, ANY OF ITS
AFFILIATES OR ANY OF THEIR RESPECTIVE DIRECTORS, OFFICERS, EMPLOYEES, REPRESENTATIVES, AGENTS,
LICENSORS OR PARTNERS BE LIABLE FOR ANY SPECIAL, INDIRECT, INCIDENTAL, EXEMPLARY,





 




			
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CONSEQUENTIAL OR
PUNITIVE DAMAGES OR LIABILITIES (INCLUDING, WITHOUT LIMITATION, SUCH DAMAGES OR LIABILITIES FOR
LOSS OF PROFITS, BUSINESS, USE OR OTHER ECONOMIC ADVANTAGE) ARISING OUT OF OR IN ANY WAY RELATED TO
THIS AGREEMENT (INCLUDING PERFORMANCE OR FAILURE TO PERFORM HEREUNDER), EVEN IF SUCH PARTY HAS BEEN ADVISED OF THE POSSIBILITY THEREOF, AND
REGARDLESS OF THE LEGAL OR EQUITABLE THEORY (CONTRACT, TORT, OR OTHERWISE).




     9.2 Omeros’ Indemnification. Omeros shall indemnify, defend and hold harmless Hospira and its
officers, employees and agents (collectively, the “Hospira Indemnitees”) from and against any and
all liabilities, obligations, penalties, claims, judgments, demands, suits, costs and expenses
(including, without limitation, reasonable attorneys’ fees) (any of the foregoing, “Damages”)
arising out of or occurring as a result of a claim or demand made by an unaffiliated third party
against a Hospira Indemnitee for property damage or personal injury (including, without limitation,
death), in connection with: (a) Omeros’ storage, promotion, labeling, marketing, distribution, use
or sale of Product; (b) Omeros’ negligence, wrongful act or willful misconduct; (c) any breach by
Omeros of its obligations, representations, warranties or covenants under this Agreement; (d) the
lack of safety or efficacy of the APIs or Product; or (e) any violation of any patent or
proprietary right of any third party relating to the APIs, Specifications or Product other than
Hospira’s General SOPs or other Hospira developed Development or Processing procedures used in the
Processing of Product pursuant to this Agreement, except to the extent that any such Damages are
caused by (i) any failure of the Product to meet the Specifications or any Latent Defect in the
Product caused by a Hospira Indemnitee, (ii) the gross negligence or willful misconduct of a
Hospira Indemnitee, (iii) by the breach by a Hospira Indemnitee of its obligations,
representations, warranties or covenants under this Agreement, including, without limitation,
failure to comply with the Specifications or any Applicable Laws, (iv) by the violation of any
patent or proprietary Intellectual Property right of any third party that was known to Hospira and
was not known to Omeros at the time of such violation, (v) the purchase, transportation, storage,
use, handling or disposal of any hazardous substances in connection with performance of the
Services by a Hospira Indemnitee, or (vi) any claim that the Processing or performance of Services
by a Hospira Indemnitee pursuant to Hospira’s General SOPs or other Hospira developed Development
or Processing procedures violates a proprietary Intellectual Property right of any third party
(except to the extent that such claim results from the Specifications or other instructions or
directions from Omeros).



     9.3 Hospira’s Indemnification. Hospira shall indemnify, defend and hold harmless Omeros and
its officers, employees, and agents (collectively, the “Omeros Indemnitees”), from and against any
and all Damages arising out of or occurring as a result of a claim or demand made by an
unaffiliated third party against an Omeros Indemnitee for property damage or personal injury
(including, without limitation, death) in connection with: (a) Hospira’s negligence or willful
misconduct; (b) any failure of the Product to meet the Specifications, any Latent Defect in the
Product caused by Hospira; (c) any breach by Hospira of its obligations, representations,
warranties or covenants under this Agreement, including, without limitation, Hospira’s failure to
comply with the Specifications or any breach by Hospira of the Applicable Laws; (d) Hospira’s
purchase, transportation, storage, use, handling or disposal of any hazardous





 




			
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substances in
connection with performance of the Services; or (e) any claim that the Processing or performance of
Services by Hospira pursuant to Hospira’s General SOPs or other Hospira developed Development or
Processing procedures violates a proprietary Intellectual Property right of any third party (except
to the extent that such claim results from the Specifications or
other instructions or directions from Omeros), except to the extent that any such Damages are
caused by; (i) the gross negligence or willful misconduct of an Omeros Indemnitee, or (ii) by the
breach by an Omeros Indemnitee of its obligations, representations, warranties or covenants under
this Agreement.




     9.4 Procedure. In the event that any third party claim, action or suit is instituted against
a Party (the “Indemnified Party”) or its employees, officers or agents in respect of which
indemnity may be sought pursuant to this Section 9, the Indemnified Party will promptly notify the
other Party (the “Indemnifying Party”) in writing (provided that the failure to give such notice
promptly will not prejudice the rights of an Indemnified Party, except to the extent that the
failure to give such prompt notice materially adversely affects the ability of the Indemnifying
Party to defend the claim, action or suit). Promptly after the Indemnified Party gives such
written notice, the Indemnifying Party and the Indemnified Party shall meet to discuss how to
respond to such claim, action or suit. The Indemnifying Party shall control the defense of such
claim, action or suit. The Indemnified Party shall cooperate with the Indemnifying Party in the
defense of such claim, action or suit, at the expense of the Indemnifying Party. In any such
proceeding, the Indemnified Party shall also have the right to retain its own counsel at its own
expense. The Indemnifying Party shall not be liable for Damages with respect to a claim, action or
suit settled or compromised by the Indemnified Party without the Indemnifying Party’s prior written
consent. No offer of settlement, settlement or compromise by the Indemnifying Party shall be
binding on an Indemnified Party without the Indemnified Party’s prior written consent (which
consent shall not be unreasonably withheld, conditioned or delayed), unless such settlement fully
releases the Indemnified Party without any liability, loss, cost or obligation to such Indemnified
Party, provided, however, that the Indemnifying Party shall have no authority to take any action as
part of any such defense or settlement that invalidates or otherwise compromises or renders
unenforceable the Indemnified Party’s Intellectual Property without the Indemnified Party’s express
prior written consent.



     9.5 Insurance. Each Party will procure and maintain, at its own expense, for the duration of
the Agreement, and for [†] thereafter if written on a claims made or occurrence reported form, the
types of insurance specified below with carriers rated A- VII or better with A. M. Best or like
rating agencies:



     (a) Workers’ Compensation accordance with applicable statutory requirements and each party
shall provide a waiver of subrogation in favor of the other party;



     (b) Employer’s Liability with a limit of liability in an amount of not less than [†]; and



     (c) Commercial General Liability including premises operations, products & completed
operations, blanket contractual liability, personal injury and advertising injury including fire
legal liability for bodily injury and property damage in an amount not less than [†] per occurrence
and [†] in the aggregate;





 




			
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     Each Party shall include the other party and their subsidiaries, affiliates, directors,
officers, employees and agents as additional insured’s with respect to Commercial General Liability
and Excess Liability but only as their interest may appear by written contract. Each Party shall
make available to the other Party, at such other Party’s request, evidence of its
maintenance of insurance in satisfaction of its obligations under this Subsection 9.5. In the
case of cancellation, non-renewal or material change in said coverage, Each Party shall promptly
provide to the other Party with a new certificate of insurance evidencing that the coverage meets
the requirements in this Subsection 9.5. Each Party agrees that its insurance shall act as primary
and noncontributory from any other valid and collectible insurance maintained by the other Party.
Each party may, at its option, satisfy, in whole or in part, its obligation under this Subsection
9.5 through its self- insurance program, subject to the other party’s review and approval of the
sufficiency of such program.



     10. TERM; TERMINATION



     10.1 Term. This Agreement shall be effective as of the Effective Date, and shall continue for
five (5) years after the date of the first commercial sale of Product (the “Initial Term”), unless
earlier terminated in accordance with this Agreement. This Agreement shall automatically renew for
up to two (2) additional twelve (12) month periods, commencing at the expiration of the Initial
Term and any extensions thereof, unless either Omeros or Hospira should terminate the Agreement by
giving the other Party written notice of intent to terminate at least twenty-four (24) months prior
to the expiration of the Initial Term or any extension thereof. The Initial Term as it may be
extended shall be referred to herein as the “Term.”



     10.2 Termination for Cause. Either Party shall have the right to terminate this Agreement (a)
for an uncured material breach by the other Party; or (b) for bankruptcy or insolvency of the other
Party, as further specified herein below in this Subection 10.2. In the event that a Party
materially breaches this Agreement, the other Party shall deliver written notice to the breaching
Party describing such breach in detail, which notice shall include a statement of the non-breaching
Party’s intent to terminate this Agreement unless such breach is remedied. If the breaching Party
does not cure such breach within sixty (60) days following receipt of such written notice from the
non-breaching Party, the non-breaching Party may terminate this Agreement by sending a written
notice of termination to the breaching Party In the event that a Party goes into liquidation, or
seeks the benefit of any bankruptcy or insolvency act, or a receiver or trustee is appointed for
its property or estate, or it makes an assignment for the benefit of creditors, whether any of the
aforesaid events be the outcome of the voluntary act of such Party or otherwise, and such
procedures are not terminated within ninety (90) days, the other Party may terminate this Agreement
by sending a written notice of termination to such Party.



     10.3 Termination by Omeros. Omeros shall have the right to terminate this Agreement at any
time, without penalty:



     10.3.1 for all countries, if, prior to Launch of the Product in any country in the Territory,
(a) Hospira and/or the Product fails to meet any performance requirement, standard or Specification
or an inability or failure of the Product to be Processed to meet the Specifications during
Hospira’s development work regarding the Product, as set forth in the Development





 




			
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Agreement; (b)
technical feasibility with respect to the Product is not demonstrated; (c) clinical efficacy and/or
safety with respect to a Product is not demonstrated; and/or (d) a primary endpoint in a clinical
study of the Product is not met; and/or.




     10.3.2 on a country by country basis within the Territory, if, at any time before or after
Launch of the Product in such country(ies) in the Territory: (a) applicable regulatory requirements
in one or more countries in the Territory have a material adverse impact on Omeros’ ability to
obtain regulatory approval for Product in such country(ies); and/or (b) Omeros receives a
materially adverse decision or determination by a Regulatory Authority in such country(ies) in the
Territory regarding the Product; and/or.



     10.3.3 for all countries, if, after Launch of the Product in any country in the Territory: (a)
pursuant to Section 3.10.6, Hospira fails to supply at least [†] of the then-current Minimum
Percentage for any [†].



     Except as specified above, termination of this Agreement as to any country in the Territory
shall not automatically terminate this Agreement for any remaining countries in the Territory.



     10.4 [†]



     10.5 Termination by Mutual Consent. The Parties may terminate this Agreement at any time by
mutual written consent.



     10.6 Effects of Termination.



     10.6.1 Return of Omeros Property and Product. Upon expiration or earlier termination of this
Agreement for any reason, Hospira shall return to Omeros all Omeros Property and Product (other
than samples retained under Subsection 3.6) within thirty (30) days after the date of such
expiration or termination.



     10.6.2 [†]



     10.6.3 Inventory. Upon termination pursuant to this Section 10, and except in instances of
breach by Hospira including without limitation failure of Product to meet Specifications, Omeros
shall purchase all inventory on hand and, if applicable, work in progress and reimburse Hospira for
Hospira’s cost of all supplies purchased and on hand or on order, if such supplies were ordered by
Hospira based on firm purchase orders or Omeros’ estimates of its requirements of Product, and such
supplies cannot be reasonably used by Hospira for other purposes. Hospira shall invoice Company
for all amounts due hereunder.



     11. FORCE MAJEURE



     11.1 Excuse from Performance. Either Party shall be excused from performing its respective
obligations under this Agreement if its performance is delayed or prevented by any event beyond
such Party’s reasonable control, including, but not limited to, acts of God, fire, explosion,
weather, disease, war, insurrection, civil strife, riots, government action, earthquake,





 




			
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terrorism,
or power failure; provided that such performance shall be excused only to the extent of and during
such disability and the affected Party shall use commercially reasonable efforts to resume
performance as soon as reasonably practicable. Any time specified for completion of performance
during or subsequent to the occurrence of any or all such events shall be
automatically extended for a commercially reasonable period of time to enable the affected
Party to recover from such disability. Hospira shall immediately notify Omeros if, by reason of
any of the events referred to herein, Hospira is unable to meet any such time for performance.
Capacity constraints due to the volume of business at Hospira shall not be deemed a force majeure
event. If Hospira experiences a force majeure event that interferes with Processing of Product at
Hospira’s Facility, Hospira shall, at Omeros’ discretion and request, cooperate in good faith with
Omeros in expeditiously transferring Processing to another of Hospira’s facilities, if available.
The Parties shall mutually discuss and implement in good faith an agreed-upon action plan for such
transfer. The Parties understand and agree that Omeros has chosen the excipient and primary
container packaging component suppliers listed in the Specifications and Hospira has agreed to such
suppliers. In the event that Hospira has reasonably objected in writing to the use of such
suppliers based on demonstrable quality or reliability concerns, and Omeros has unreasonably
refused alternate suppliers proposed by Hospira for reasons other than demonstrable quality or
reliability concerns, then under such circumstances, Hospira shall not have any liability to
Omeros, nor shall Hospira be deemed to be in breach of this Agreement, if Hospira is unable to
supply Product to Omeros due to a failure of such suppliers to provide such excipients and/or
primary container packaging components to Hospira.




     12. MISCELLANEOUS



     12.1 Governing Law. This Agreement shall be governed by and construed in accordance with the
laws of the State of Delaware, without regard to conflicts of laws or rules thereof.



     12.2 Dispute Resolution. In the event of a dispute arising from the performance of this
Agreement, each Party agrees to notify the other Party of the specific complaints or points of
disagreement, and to use its good faith efforts to resolve any such disputes without legal action.
Except for a dispute arising under Subsection 3.3 (which shall be resolved in accordance with
Subsection 3.3.4), in the event such good faith efforts fail, such dispute shall be first referred
to authorized executives of each Party (collectively, “Executives”) for resolution, upon one Party
providing the other Party with written notice that such dispute exists and has not been resolved.
The Executives shall attempt to resolve such dispute through good faith discussions prior to
instituting any civil action to resolve such dispute.



     12.3 Independent Contractors. For purposes of this Agreement, Hospira shall be deemed to be
an independent contractor and not an agent or employee of Omeros or a joint venturer with Omeros,
and nothing in this Agreement shall be construed to create any other relationship between Hospira
and Omeros. Neither Party shall have any right, power, or authority to assume, create, or incur
any expense, liability or obligation, expressed or implied, on behalf of the other Party. Hospira
shall be solely responsible for withholding and payment of all appropriate state and federal taxes,
including social security payments, with respect to all of its employees.





 




			
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     12.4 Importer of Record. In the event any APIs or other Materials supplied by Omeros are
imported into the United States for delivery to Hospira, Omeros shall be the importer of record of
such APIs or other Materials, unless otherwise agreed with Hospira.



     12.5 Severability/Enforceability. If any provision(s) of this Agreement shall be held
invalid, illegal, or unenforceable by a court of competent jurisdiction, this Agreement shall
continue in full force and effect without said provision(s), consistent with the intent of the
Parties at the time of its execution. If deletion of such provision materially alters the basis of
this Agreement, then the Parties shall negotiate a good faith alternative.



     12.6 Modification/Waiver. This Agreement may not be altered, amended, or modified (nor shall
any obligation or breach be deemed waived) in any way, unless such alteration, amendment or
modification is in writing and signed by the Parties (or unless such waiver is in writing and
signed by the waiving Party). The failure of a Party to enforce any provision(s) of this Agreement
shall not be construed to be a waiver of the right of such Party to thereafter enforce that
provision or any other provision or right.



     12.7 Notices. All notices and demands required or permitted to be given or made pursuant to
this Agreement shall be in writing and shall be deemed given if delivered personally or by
facsimile transmission (receipt verified), mailed by registered or certified mail (return receipt
requested), postage prepaid, or sent by express courier service, properly addressed to the address
of the Party to be notified as shown below:


If to Hospira:



Hospira Worldwide Inc.

D-988, Building H1

275 North Field Drive

Lake Forest, Illinois 60045

Attention: VP & GM, One2One Global Contract Manufacturing Services

Facsimile: 224-212-3210



With a copy to:



Hospira, Inc.

Building H1, Dept NLEG

275 North Field Drive

Lake Forest, Illinois 60045

Attention: General Counsel

Facsimile: 224-212-2088



If to Omeros:



Omeros Corporation

1420 Fifth Avenue, Suite 2600

Seattle, Washington 98101

Attention: Chief Executive Officer






 




			
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With a copy to: Vice President, Patent & General Counsel

Facsimile: 206-264-7856



or to such other address as to which either Party may notify the other. Any notice sent by
facsimile transmission shall be followed within twenty-four (24) hours by a signed notice sent by
first class mail, postage prepaid or by express courier service.




     12.8 Assignability. Neither Party may assign its rights and/or delegate its obligations under
this Agreement without the other Party’s prior written consent (which shall not be unreasonably
withheld or delayed); provided that either Party may assign or transfer this Agreement to any
successor in interest (whether by merger, acquisition, asset purchase or otherwise) to all or
substantially all of its business to which this Agreement relates, provided that the assigning
Party shall provide written notice to the other within thirty (30) days prior to such assignment.
The obligations and rights under this Agreement shall be binding upon all permitted assigns.



     12.9 Public Announcements. Subject to disclosures permitted under Subsections 8.1, 8.2 and
8.3 or as otherwise required by law or regulation, no public announcement relating to this
Agreement shall be made by either Party without the prior written consent of the other Party, and
neither Party shall use the other Party’s name, trademark or trade name, or the name of any
employee of the other Party, in any advertising or news release (including, without limitation, any
posting on the worldwide web) without the prior written consent of the other Party.



     12.10 Binding Effect. This Agreement shall be binding upon and inure to the benefit of the
Parties hereto and their respective successors and permitted assigns.



     12.11 Survival. The following Sections and Subsections shall survive the termination or
expiration of this Agreement for any reason: Sections 1 (to the extent definitions are embodied in
the following Sections and Subsections), 4, 5, 7, 8, 9, 11 and 12 and Subsections 2.2.1, 3.1 (for
Processed Product), 3.2, 3.3, 3.4 (except for replacement of non-conforming Product), 3.6 and 3.7
(with respect to retention of samples), 3.12, 3.13, 5.1-5.4, 5.6, 5.7, 5.8 and 10.6.



     12.12 Integration. This Agreement including any Exhibits hereto, shall constitute the entire
Agreement between the Parties with respect to the subject matter hereof, and shall supersede all
prior communications, understandings, and agreements (including any prior confidentiality
agreement) with respect thereto.



     12.13 Counterparts. This Agreement may be executed by original or facsimile signature in two
or more counterparts, each of which shall be deemed an original and all of which together shall
constitute one and the same instrument.





 




			
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     IN WITNESS THEREOF, the Parties have caused this Agreement to be duly executed as of the
Effective Date.



	 	 	 	 	 	 	 
	 	 	OMEROS CORPORATION	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ Gregory A. Demopulos
 

	 	 
	 	 	Gregory A. Demopulos, M.D.	 	 
	 	 	Chairman & CEO	 	 
	 
	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	 	 	HOSPIRA WORLDWIDE, INC.	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ Thomas Moore
 

	 	 
	 	 	Thomas Moore	 	 
	 	 	President, Global Pharmaceuticals	 	 








 




			
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Confidential 

Page 32




EXHIBIT A




PRODUCT ATTRIBUTES




Commercial Product





	 	§	 	Manufactured at Hospira’s McPherson, Kansas facility [†]
	 
	 	§	 	[†]
	 
	 	§	 	[†]
	 
	 	§	 	[†]
	 
	 	§	 	[†]
	 
	 	§	 	Bulk APIs to be supplied by Omeros, [†]
	 
	 	§	 	[†]
	 
	 	§	 	Release testing to be performed by Hospira with issuance of a Certificate of Analysis
	 
	 	§	 	[†]







 




			
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Confidential 

Page 33




EXHIBIT B




PRODUCT PRICING




	 	 	 	 	 	 	 
	 

	 	[†]
	 	[†]	 	 
	 
	 

	 	[†]
	 	[†]	 	 
	 
	 

	 	[†]
	 	[†]	 	 
	 
	[†]

	 	[†]
	 	[†]
	 	[†]







	 	•	 	[†]
	 
	 	•	 	[†]







 




			
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Confidential 

Page 34




EXHIBIT C




PRODUCT STABILITY MATRIX




A stability time point matrix shall be mutually agreed in writing.






 




			
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