exv10w29



 





Exhibit 10.29




EXCLUSIVE LICENSE AND SPONSORED RESEARCH AGREEMENT




between




OMEROS CORPORATION and the UNIVERSITY OF LEICESTER




     This license agreement (the “Agreement”) is made effective the 10th day of June 2004 (the
“Effective Date”) between Omeros Corporation, a Washington corporation having a principal place of
business at 1420 Fifth Avenue, Suite 2600, Seattle WA 98101 USA (“Omeros”) and the University of
Leicester, having a principal place of business at University Road, Leicester LE1 7RH, United
Kingdom (“Leicester”).



     WHEREAS Leicester owns rights to certain technology related to mannan-binding lectin
associated serine protease-2 (“MASP-2”) and a MASP-2 related plasma protein of 19 kDa commonly
referred to as “MAp19”, which technology was developed in whole or in part by Wilhelm J. Schwaeble,
Ph.D., (“Dr. Schwaeble” or the “Principal Investigator”) and Cordula M. Stover, Ph.D. (“Dr.
Stover”), both employees of Leicester, and has obtained ownership of related technology developed
by Teizo Fujita (“Dr. Fujita”) of the Fukushima Medical University, School of Medicine
(“Fukushima”); and



     WHEREAS Omeros wishes to undertake an exclusive license in Leicester’s MASP-2 and MAp19
technology (including the related technology developed by Dr. Fujita), and to sponsor further
research to develop Leicester’s MASP-2 and MAp19 technology at Leicester under the direction of the
Principal Investigator; and



     WHEREAS Leicester wishes to grant Omeros an exclusive license in Leicester’s
MASP-2 and MAp19 technology (including the related technology developed by Dr. Fujita) in
return for potential royalty payments and sublicense revenue sharing, and to accept payment for
such sponsored research;



     NOW THEREFORE, in consideration for the mutual covenants and obligations set forth herein as
well as other good and valuable consideration, the parties hereby agree as follows:




	1	 	Definitions
	 
	1.1	 	Reference to “Leicester” and “Omeros” in regards to any intellectual property right developed
by the respective party shall be construed to refer to the respective party as well as the
respective party’s employees, officers, directors, consultants and agents.
	 
	1.2	 	“Intellectual Property Rights” shall mean all inventions, ideas, discoveries, issued,
reissued or reexamined patents, pending and future patent applications, continuation,
continuation-in-part and divisional patent applications, utility models, inventor’s
certificates, trade secrets, know-how, copyrights and trademarks.
	 
	1.3	 	“Sponsored Research” shall mean all research activities carried out by Leicester and/or its
employees (as may be agreed by Leicester and Omeros) with the financial sponsorship, in whole
or in part, by Omeros in accordance with Section 2 herein below or as otherwise agreed.






 





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	1.4	 	“Leicester IP” shall mean all Intellectual Property Rights owned or held by Leicester,
including without limitation all such Intellectual Property Rights arising from the work of
Dr. Schwaeble, Dr. Stover, and/or other Leicester employees as well as that acquired under an
assignment agreement from Dr. Fujita, prior to the Effective Date of this Agreement, or
developed or obtained by Leicester after the Effective Date of this Agreement both (a)
independently of Omeros (as determined by inventorship under US law with respect to any
patents and patent applications) and (b) independently of the Sponsored Research, provided
however that in the event and to the extent that such independently developed Intellectual
Property Rights arise as the direct result of sponsorship by a not-for-profit enterprise in
accordance with Section 4.3 herein, such independently developed Intellectual Property Rights
shall be included within the scope of the license granted herein only if Leicester or
Leicester employee(s) obtain an assignment or release of such independently developed
Intellectual Property Rights from such not-for-profit enterprise, which assignment or release
Leicester shall exert all reasonable efforts to obtain or to cause its employees to obtain,
provided always that any of the Intellectual Property Rights described above in this section
1.4 are directly related to compositions, antibodies and/or methods for the inhibition of
MASP-2 and/or MAp19 and/or the diagnosis and/or treatment of MASP-2 or MAp19 mediated
disorders and/or deficiency syndromes, as well as methods, polynucleotides, polypeptides,
sequences and tools related to the development and production of MASP-2 or MAp19 antibodies
including without limitation murine, human, humanized and recombinant antibodies, murine lines
in which MASP-2 or MAp19 genes have been knocked-out or knocked-in, and all Intellectual
Property Rights in the subject matter disclosed or claimed in the draft patent application
entitled Genetically modified non-human mammals and cells filed in the British Patent
Office on 10 June 2004 and attached hereto as Exhibit A [†].
	 
	1.5	 	“Omeros IP” shall mean all Intellectual Property Rights owned or held by Omeros prior to the
Effective Date of this Agreement, or developed or obtained by Omeros after the Effective Date
of this Agreement independently of Leicester (as determined by inventorship under US law with
respect to any patents and patent applications), including without limitation all such
Intellectual Property Rights related to methods and pharmaceuticals or other agents to inhibit
pain, inflammation, cartilage loss, vasospasm, smooth muscle spasm, restenosis, or tumor cell
adhesion, and/or to accelerate recovery of joint motion and function, for use in surgical
procedures (including without limitation arthroscopic, cardiovascular, urologic and general
surgical procedures), other medical procedures, and/or for treatment of cartilaginous
disorders, and drug delivery methods and systems.
	 
	1.6	 	“Joint IP” shall mean (a) all Intellectual Property Rights in technology that is developed
jointly (as determined by inventorship with respect to any patents and patent applications) by
Omeros and Leicester (as may be agreed by Leicester and Omeros) during the Sponsored Research
Term (as that term is defined in Section 2.2 herein), and (b) all Intellectual Property Rights
arising from and as the direct result of the Sponsored Research. Should Dr. Schwaeble or
other Leicester employees enter into a consulting agreement with Omeros for general scientific
consulting such as in the field of





 





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	 	 	inflammation, then to the extent that such scientific consulting services may pertain to
MASP-2 and MAp19, the results of such scientific consulting services will be treated as part
of the Joint IP. However, the parties acknowledge herein that research by Dr. Schwaeble and
other Leicester employees on behalf of Omeros related to MASP-2 and MAp19 will be carried
out in major part through the Sponsored Research.
	 
	1.7	 	[†]
	 
	1.8	 	“Licensed Products” shall mean all antibodies, inhibitors and all other products that, were
it not for the license granted to Omeros under this Agreement, infringe, or the use,
manufacture, offer for sale or sale of which infringe any valid and subsisting claim(s) of any
issued patent or any patentable claim(s) of any pending patent application included within the
Leicester IP in the country or countries in which such products are offered for sale, sold,
manufactured or used, excluding all products that would be included within the Licensed
Products in accordance with the above definition only because they are products that infringe
any claim(s) within the [†].
	 
	1.9	 	“Licensed Research Products” shall mean any antibodies that are not Licensed Products and
which are produced or developed as the direct result of use of murine line(s) that, were it
not for the license granted to Omeros under this Agreement, infringe, or the use of which
infringe, any valid and subsisting claim(s) of any issued patent or any patentable claim(s) of
any pending patent application for such murine line(s) included within the Leicester IP in the
country or countries in which such lines are propagated or used.
	 
	1.10	 	“Net License Proceeds” shall mean the total of the gross monetary amounts invoiced and
collected by Omeros for Licensed Products and Licensed Research Products (or that portion of
the value of any combination product attributed to a Licensed Product or a Licensed Research
Product included therein) used, manufactured, directly sold or directly distributed by Omeros,
less (a) the sum of the following actual and customary deductions where applicable: cash,
trade, or quantity discounts; sales, use, tariff, import/export duties or other excise taxes,
and any other governmental taxes imposed on particular sales; transportation charges and
allowances; commissions to third party sales agents; and credits to customers because of
rejections or returns and (b) any accrued Omeros IP Legal Fees (as defined below) not
previously deducted. For purposes of this paragraph, the acquisition of Licensed Products and
Licensed Research Products from Omeros as part of an acquisition of all or a substantial part
of the assets of Omeros’ business to which this Agreement pertains shall not be considered a
manufacture, sale or distribution.
	 
	1.11	 	“Net Sublicense Proceeds” shall mean the total of all sublicense royalties or sublicense fees
received by Omeros from third parties to which Omeros grants a sublicense under the Leicester
IP for the manufacture, sale or distribution of Licensed Products or Licensed Research
Products, and which were not included in the Net License Proceeds, less any accrued Omeros IP
Legal Fees not previously deducted, provided however that the Net Sublicense Proceeds shall
not include any fees or payments from such third parties to Omeros to support research and
development efforts, to purchase equity in Omeros, or for
any other purpose other than as compensation for sublicense rights.





 





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	1.12	 	“Omeros IP Legal Fees” shall mean the sum of all legal fees and costs incurred by Omeros to
(a) evaluate, apply for, prosecute and maintain any Intellectual Property Rights included
within the Leicester IP, including without limitation any such fees and costs paid by Omeros
as reimbursement to Leicester for such fees and costs incurred by Leicester, and (b) obtain or
assist Leicester in obtaining or attempting to obtain clear, defensible, lawful and
uncontested title to the Leicester IP, including without limitation all such fees and costs
incurred in [†].
	 
	1.13	 	“Third Party License Fees” shall mean all royalties or other fees paid by Omeros to third
parties for a license from such third parties under Intellectual Property Rights owned or held
by such third parties for the manufacture, use, offer for sale, sale or distribution of
Licensed Products or Licensed Research Products, but shall exclude that portion of any such
third party royalties or other fees paid by Omeros attributed to items sold in combination
with the Licensed Products or the Licensed Research products, which items are not Licensed
Products or Licensed Research products.
	 
	2	 	Sponsored Research
	 
	2.1	 	Leicester shall perform research to be conducted by or under the direction of the Principal
Investigator (as may be agreed between Leicester and Omeros), directed to advancing the
technology included in the Leicester IP or related technology concerning the characterization
and inhibition of MASP-2 or MAp19, supported by the financial sponsorship of Omeros, and
without the use of third party sponsorship that would provide any intellectual property rights
in the results of the Sponsored Research to such third party, in accordance with one or more
research plans (“Research Plans”) agreed to in advance in writing between Leicester and
Omeros. An initial Research Plan is attached hereto as Exhibit B. No Research Plan or any
amendment thereto shall be effective until executed by Leicester and Omeros, and upon mutual
execution shall be automatically incorporated into this Agreement. Each Research Plan shall
define scientific aims, objectives and activities, a budget and a timeline for performance of
Sponsored Research during the corresponding time period.
	 
	2.2	 	The Sponsored Research shall be completed over a term (the “Sponsored Research Term”) that
will initially run for a period of one (1) year from the appointment or designation of
appropriate and mutually acceptable staff at Leicester, and that is extendable annually upon
mutual written agreement for a total term of three (3) years from the Effective Date of this
Agreement or as may otherwise be mutually agreed in writing. If Omeros or Leicester does not
wish to extend the Sponsored Research Term for the second or the third year, such party shall
provide the other party notice of non-extension at least ninety (90) days prior to the end of
the preceding year. The Sponsored Research Term shall run independently of the License Term
(as defined herein below) of this Agreement. Termination of this Agreement shall result in
termination of the Sponsored Research Term, but termination of the Sponsored Research Term,
such as in
accordance with Section 14.4 herein, shall not affect the overall status of this Agreement
or the License Term.





 





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	2.3	 	Leicester shall supply all necessary personnel, administrative management, facilities,
equipment and supplies to enable timely completion of the Sponsored Research. Reimbursement
for Leicester’s costs and expenses for the Sponsored Research shall be provided only to the
extent agreed to in writing in the applicable Research Plan. Each Research Plan will be
completed diligently by Leicester using best efforts in accordance with prevailing
professional standards and all applicable laws, regulations and Leicester’s official policies.
Should the Principal Investigator become unavailable to complete any Research Plan, Leicester
and Omeros may agree on a substitute investigator, and in the event that a mutually acceptable
substitute is not available, either party may terminate the Sponsored Research Term.
	 
	2.4	 	Within thirty (30) days of the end of each quarter of the Sponsored Research Term, Leicester
shall submit a status report in written and electronic form (“Status Report”) summarizing the
results of the research completed during that quarter, except that annually within thirty (30)
days of the end of each year of the Sponsored Research Term or at such other point in time as
may be mutually agreed in writing, Leicester shall submit a final status report in written and
electronic form (“Final Report”) detailing the results of the research completed during such
year of the Sponsored Research Term. Upon Omeros’ request, Leicester shall complete all
requested corrections and make reasonable revisions to each Status Report and/or Final Report
to place it into a form suitable to meet Omeros’ objectives, including potential use of any
Status Report and/or any Final Report as part of any regulatory submissions.
	 
	2.5	 	In full and complete consideration for the Sponsored Research completed by Leicester during
the Sponsored Research Term in accordance with the Research Plan(s), Omeros shall pay
Leicester [†] for the first year, and unless a change in the level of Sponsored
Research work is agreed to in writing in subsequent Research Plans, this amount shall be
increased by [†] per year plus, in the event of continued use of a Leicester
laboratory technician in performing Sponsored Research activities after the first year of the
Sponsored Research Term, any increase in fees due to British national standard pay scale
changes applicable on a pro rata basis to such Leicester laboratory technician’s Sponsored
Research activities, for each mutually agreed subsequent year of the Sponsored Research Term
throughout which Sponsored Research is carried out (i.e., a total of [†] if the
Sponsored Research Term is extended for a total three-year period and the level of Sponsored
Research work during each year remains constant), payable at the rate of [†] of the
annual amount per quarter within thirty (30) days of the end of each quarter within the
Sponsored Research Term, provided however that no payment shall be due for any quarter prior
to the receipt and acceptance by Omeros of a Status Report or any Final Report, as
appropriate, for the respective quarter or year.
	 
	2.6	 	Omeros and the Principal Investigator shall collaborate on any proposed scientific
publications of Sponsored Research data and results, including a discussion of authorship
and contents. Leicester shall furnish Omeros with copies
of any publication or written or oral disclosure that is
proposed by Leicester, including, without limitation,
disclosures in papers or abstracts or at research seminars,
lectures, professional meetings, or poster sessions, at
least sixty (60) days prior to the proposed date for
submission for publication





 





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	 	 	or disclosure. During such
60-day period, Omeros shall have the right to review and
comment on such publication for accuracy and protection of
confidential information. Additionally, upon Omeros’
written request during the foregoing 60-day period, the
proposed submission for publication or disclosure shall be
delayed until Omeros has completed the filing of patent
applications directed to information contained in such
proposed publication or disclosure or based on Omeros’
reasonable determination that publication should be delayed
due to other business considerations, but in no event will
such delay exceed an additional ninety (90) days following
the initial 60-day period without Leicester’s written
consent, which consent shall not be unreasonably withheld.
Omeros shall have the right, in its sole discretion, to
use, disclose, disseminate and publish (with due
acknowledgement of authorship) all data and results arising
out of the Sponsored Research for any and all purposes,
including without limitation in and for submissions to any
regulatory agencies and in marketing any products
including, but not limited to, Licensed Products and
Licensed Research Products.
	 
	3	 	Ownership of Intellectual Property
	 
	3.1	 	All Leicester IP shall remain owned or held by Leicester to the same extent as would be the
case were it not for this Agreement.
	 
	3.2	 	All Omeros IP shall remain owned or held by Omeros to the same extent as would be the case
were it not for this Agreement.
	 
	3.3	 	All Joint IP shall be jointly owned by Omeros and Leicester, i.e., Omeros and Leicester each
shall hold a 50% undivided joint ownership interest in all Joint IP.
	 
	4	 	Grant Of License
	 
	4.1	 	Leicester hereby grants to Omeros for the term of this Agreement a royalty-bearing,
world-wide exclusive license in the Leicester IP for the research, development, manufacture,
use, sale, offering for sale, distribution, exportation and importation of any and all
products and the practice of all methods within the Leicester IP, including without limitation
the exclusive right to develop, manufacture, use, sell, offer for sale, distribute, export and
import the Licensed Products and the Licensed Research Products and to use all murine lines
within the Leicester IP for all purposes including without limitation the research,
development and production of antibody products.
	 
	4.2	 	Leicester hereby grants to Omeros a fully-paid up, irrevocable, world-wide exclusive license
in and to Leicester’s joint ownership interest in the Joint IP, for the manufacture, use,
sale, offering for sale, distribution, exportation and importation of any and all products and
the practice of all methods encompassed by the Joint IP.
	 
	4.3	 	Subject to publication approval and timing procedures consistent with Section 2.6 herein,
Leicester shall retain the right to use the Leicester IP and the Joint IP for the purpose of
conducting non-commercial, academic research, including research sponsored by not-for-profit
entities, which shall not include the performance of research sponsored (directly or





 





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	 	 	indirectly) by or on behalf of any for-profit entity that is in direct competition with Omeros
in a technology, product or research tool that is the subject of the Leicester IP or Joint IP.
	 
	4.4	 	Omeros shall have the right to grant sublicenses in the Leicester IP and the Joint IP under
this Agreement subject, with respect to the Leicester IP, to Omeros’ obligations to share
sublicense revenues as set forth in Section 5.
	 
	4.5	 	As part of the licenses granted to Omeros under Sections 4.1 and 4.2, Leicester agrees to
transfer and provide and/or make available to Omeros upon request progeny from the licensed
murine lines, cell lines, biological materials and any other research materials encompassed by
or included within the Leicester IP and/or the Joint IP to which Leicester has appropriate
rights and access, all such materials being provided on the basis of Omeros reimbursing
Leicester for Leicester’s actual cost in providing such materials but for no additional
consideration.
	 
	4.6	 	Leicester also grants to Omeros a right of first refusal for an exclusive license in all of
Leicester’s Intellectual Property Rights, for which Omeros has not already been granted a
license hereunder, and for which Leicester has all necessary rights to offer such first
refusal, and Leicester shall exert reasonable efforts to obtain such necessary rights, in (1)
any commercially applicable technology that arises during the Term of this Agreement and is
directly related to MASP-2 and/or MAp19 as more fully defined in the Leicester IP and the
Joint IP, and (2) any technology that has been developed through the contribution of both
Omeros and Leicester after the Sponsored Research Term.
	 
	5	 	Royalties and Sublicense Revenue
	 
	5.1	 	Omeros shall pay Leicester on a quarterly basis a royalty for Licensed Products of
[†] of the that portion of the Net License Proceeds realized during each respective
quarter from Licensed Products (the “Licensed Product Royalty”), provided however that Omeros
shall be entitled to deduct from the Licensed Product Royalty any accrued Third Party License
Fees paid by Omeros on the Licensed Products not already deducted, but in no event shall Third
Party License Fees be permitted to be deducted to an extent that such Third Party License Fees
would reduce the Licensed Product Royalty by greater than [†] for any given quarter.
	 
	5.2	 	Omeros shall pay Leicester on a quarterly basis a royalty for Licensed Research Products (the
“Licensed Research Products Royalty”) of (a) [†] of that portion of the Net License
Proceeds realized from Licensed Research Products during each respective quarter during and
only during the first [†] period following initial introduction of the relevant
product to a commercial market, and (b) [†] of that portion of the Net License
Proceeds realized from Licensed Research Products during each respective quarter after the
first [†] period
until such time that any third party should introduce into a commercial market a competing
product that does not infringe the Leicester IP, after which third-party introduction no
further Licensed Research Products Royalty shall be payable for the relevant product,
provided however that Omeros shall be entitled to deduct from the





 





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	 	 	Licensed Research Products
Royalty any accrued Third-Party License Fees paid by Omeros on Licensed Research Products
not already deducted, but in no event shall Third-Party License Fees be permitted to be
deducted to an extent that such Third Party License Fees would reduce the Licensed Research
Products Royalty by greater than [†] for any given quarter.
	 
	5.3	 	Omeros shall pay Leicester on a quarterly basis a share of that portion of the Net Sublicense
Proceeds collected by Omeros on Licensed Products and collected by Omeros (“Sublicensed
Product Revenue Share”) from sublicensed third parties during each respective quarter, such
Sublicensed Product Revenue Share being either (a) [†] for any sublicenses in
connection with the Licensed Products granted hereunder prior to the earlier of (i)
[†], or (ii) the second year anniversary of the Effective Date of this Agreement, or
(b) [†] for any sublicenses in connection with the Licensed Products granted
hereunder thereafter.
	 
	5.4	 	Omeros shall pay Leicester on a quarterly basis a “Sublicensed Research Product Revenue
Share” that is (a) an initial percentage share (“First Share Percentage”) of that portion of
the Net Sublicense Proceeds realized from Licensed Research Products and collected by Omeros
from sublicensed third parties during each respective quarter during and only during the first
[†] period following initial introduction to a commercial market of the relevant
antibody product by the respective sublicensee, and (b) a subsequent percentage share (“Second
Share Percentage”) of that portion of the Net Sublicense Proceeds realized from Licensed
Research Products and collected by Omeros from sublicensed third parties during each
respective quarter after the initial [†] period. For any sublicenses in connection
with Licensed Research Products granted hereunder prior to the earlier of (i) [†], or
(ii) the second year anniversary of the Effective Date of this Agreement, the First Share
Percentage shall be [†] and the Second Share Percentage shall be [†]. For
any sublicenses in connection with Licensed Research Products granted hereunder thereafter,
the First Share Percentage shall be [†] and the Second Share Percentage shall be
[†].
	 
	5.5	 	Omeros shall promptly provide Leicester with a copy of all sublicenses granted by Omeros in
the Leicester IP and/or the Joint IP under this Agreement.
	 
	5.6	 	Following receipt from the University of the results of all Sponsored Research and the
completion of all other necessary and beneficial research activities by Omeros and/or by
others to support appropriate government regulatory submissions by Omeros, [†],
Omeros shall use reasonable efforts, based on reasonable commercial prudence, to diligently
develop and introduce to the market one or more Licensed Products and/or Licensed Research
Products. Ongoing performance of research and/or development efforts to generate or further
advance one or more Licensed Products and/or Licensed Research
Products by Omeros, internally at Omeros and/or under contract with Leicester and/or a third
party, shall be deemed to be diligent efforts under this Section 5.6.
	 
	5.7	 	It is Omeros’ current intent to commercially develop and seek regulatory clearance to
clinically test and then market an inhibitor of MASP-2 and/or MAp19 activity following





 





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	 	 	Leicester’s identification of selective and high-affinity inhibitors of MASP-2 and MAp19
activity and demonstration by Leicester of the therapeutic benefit of such inhibitors in
animal models. Within three months of the identification by Omeros of a Licensed Product or
Licensed Research Product that is determined by Omeros to be a viable and optimal clinical
development candidate, Omeros will submit a development plan to Leicester that sets forth
Omeros’ planned activities and estimated timing for the development, regulatory approval and
market introduction of one or more Licensed Products and/or Licensed Research products.
Assuming anticipated and adequate progress is made in the Sponsored Research [†],
Omeros anticipates the identification of an initial potential candidate for a Licensed Product
or Licensed Research Product that is a potential clinical development candidate within two
years of the commencement of the Sponsored Research. The foregoing statements within this
Section 5.7 and such development plan are or will be provided as indications of current or
future intentions only, and shall have no binding effect on Omeros, nor shall it give rise to
any right or obligation to either party, and any modification, alteration or failure to meet
any of these intentions shall have no impact on this Agreement.
	 
	6	 	Payments
	 
	6.1	 	Quarterly royalty and sublicense revenue payments shall be made in British Pounds Sterling by
Omeros to Leicester within sixty (60) days of the end of the quarter. Payments shall be
computed based on a conversion from any other denomination to British Pounds Sterling for any
revenues received or costs and expenses incurred by Omeros during the relevant quarter or
other reporting period, as provided herein, using the prevailing exchange rate in effect at
the date and time that funds are transferred from Omeros’ account to Leicester’s account (in
the case of payment by wire transfer) or at the date and time of issuance of a check by Omeros
(in the case of payment by check). Each quarterly payment shall be accompanied by a report
specifying (a) the source of the royalties itemized by product and country, (b) any Omeros IP
Legal Fees or Third Party License Fees that were deducted from gross proceeds to determine Net
License Proceeds or Net Sublicense Proceeds as provided in Sections 1.10 or 1.11 of this
Agreement, and (c) the total of all discounts, returns, credits and commissions deducted from
gross proceeds to determine Net License Proceeds or Net Sublicense Proceeds as provided in
Sections 1.10 or 1.11 of this Agreement. Following the two-year anniversary of the Effective
Date of this Agreement, in the event that Omeros receives no such quarterly royalty and
sublicense revenue in any given quarter, it shall nevertheless submit a quarterly report to
that effect to Leicester within sixty (60) days of the end of the quarter.
	 
	6.2	 	Leicester reserves the right to employ a certified public accountant to review and reconcile
the directly relevant accounting records and procedures of Omeros as they relate
to the determination of royalties or sublicense revenue fees under Section 5 herein during
reasonable business hours and no more than twice a year, and Omeros agrees to make available
at Omeros’ place of business all such directly relevant accounting records for that purpose
within 30 (thirty) days of written request by Leicester. The cost of such review shall be
borne by Leicester, unless it is found that Omeros under-paid a quarterly royalty or
sublicense revenue fees for any quarter by an amount of 10% (ten percent) or





 





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	 	 	greater, in
which case the cost of such review shall be borne by Omeros.
	 
	6.3	 	In the event any royalty or sublicense revenue fee payments due under Section 5 herein are
not timely paid by Omeros, Omeros shall pay to Leicester interest charges on such late
payments at a rate of [†] per annum.
	 
	6.4	 	Not withstanding anything to the contrary herein, Omeros shall have no obligation to pay any
royalties or sublicense revenue fees under Section 5 for any product based on any patent claim
that has been declared invalid or unenforceable by a court or governmental body of competent
jurisdiction or based on any patent claim that is not enforceable in the jurisdiction(s) where
such products are manufactured, used, sold, offered for sale, imported or distributed.
	 
	7	 	License Progress
	 
	7.1	 	Omeros shall on an annual basis, commencing on the one-year anniversary of the Effective Date
of this Agreement and annually thereafter, deliver to Leicester within thirty (30) days after
the end of the respective year a written progress report detailing the status of Omeros’
efforts to fund, patent, develop and commercialize Licensed Products and Licensed Research
Products.
	 
	8	 	Patent Prosecution
	 
	8.1	 	Omeros shall have the sole right at its discretion to apply for, prosecute and maintain
patents for inventions included within the Leicester IP and the Joint IP (“Patent Filings”) in
the name of the legally appropriate inventors and/or parties to this agreement and/or jointly
with third parties as may be legally appropriate, provided however that (a) Omeros shall bear
all cost and expense for all such Patent Filings, subject to the right to deduct Omeros IP
Legal Fees as set forth herein, (b) Omeros shall keep Leicester timely informed of the
progress of all Patent Filings and timely provide Leicester copies of all official
documentation related to such Patent Filings, (c) at Omeros’ discretion and until such time
that Omeros provides a written request for transfer of responsibility, Leicester shall
continue at Omeros’ cost with the prosecution of any patent applications for the Leicester IP
it may have filed prior to the Effective Date of this Agreement, subject to consultation with
and direction from Omeros prior to taking any substantive action, but in any event Omeros
shall assume responsibility for prosecuting the patent application attached as Exhibit A
hereto within two months following the later of the filing of such patent application by
Leicester or the Effective Date of this Agreement, and (d) Omeros shall exert commercially
reasonable efforts to diligently pursue all Patent Filings to issuance or final determination
of unpatentability, provided however that if Omeros
determines at its sole discretion to not make Patent Filings for any commercially
significant inventions within the Leicester IP or the Joint IP in any countries of
commercial significance, or abandons any Patent Filing prior to issuance or final
determination of unpatentability, Omeros shall give Leicester advance written notice of such
determination, Leicester shall have the right thereafter to elect upon written notice to
Omeros to pursue such Omeros abandoned Patent Filings at Leicester’s sole expense,





 





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	 	 	and such
Omeros abandoned Patent Filings shall be excluded from the scope of the licenses granted
under this Agreement.
	 
	8.2	 	Omeros shall reimburse Leicester for Leicester’s reasonable documented legal fees and costs
paid by Leicester for any patent applications prepared and/or filed or prosecuted by Leicester
for inventions within the Leicester IP prior to the effective date of this Agreement or in
accordance with Section 8.1 above. Payment for such reimbursed expenses shall be made within
thirty (30) days of Omeros’ having received a receipt-documented invoice from Leicester,
provided however that Leicester represents that all such legal fees and costs incurred by
Leicester prior to the effective date of this Agreement shall not exceed [†].
	 
	8.3	 	Leicester shall promptly provide written disclosure to Omeros of any inventions,
improvements, or applications included within the Leicester IP or Joint IP conceived,
developed, made or arising before or during the term of this Agreement. Leicester will
provide all reasonable assistance, including review of documents and the execution of all
documents and causing Leicester’s employees to review and execute all documents, necessary to
make, prosecute, maintain and enforce the Patent Filings, all for no additional consideration
but with reimbursement by Omeros of Leicester’s reasonable expenses for such assistance.
	 
	8.4	 	Leicester shall promptly provide written disclosure to Omeros of any and all potentially
material prior art known prior to the Effective Date of this Agreement or that becomes known
during the License Term of this Agreement to any Leicester employee that is associated with
this Agreement, the Sponsored Research, the Leicester IP or the Joint IP.





 





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	9	 	Representations, Warranties and Other Obligations of Omeros
	 
	9.1	 	Omeros represents and warrants that it has the requisite corporate power and authority and
the legal right to enter into this Agreement and to perform its obligations hereunder.
	 
	9.2	 	Omeros has and will maintain reasonably adequate insurance coverage for employment practices
and general liability for all its activities under this Agreement. Prior to Omeros’ marketing
of any Licensed Product, Licensed Research Products, or product encompassed by the Joint IP,
or making any such products available for use in any human patients, Omeros will obtain and
maintain reasonably adequate product liability insurance.
	 
	10	 	Representations, Warranties and Other Obligations of Leicester
	 
	10.1	 	Leicester has disclosed to Omeros the existence of the [†] and information as to the
development of the Leicester IP, and Leicester warrants that it has made reasonable efforts to
ascertain the details of such development and that it reasonably believes the same to be true.
[†].
	 
	10.2	 	[†]
	 
	10.3	 	[†]
	 
	10.4	 	Leicester represents and warrants, subject to the disclosure referred to in Section 10.1,
that it is the owner of all right, title and interest in any and all inventions included
within the Leicester IP and the Joint IP made or to be made wholly or jointly by Leicester
employees, including without limitation those made by Dr. Schwaeble and Dr. Stover, and shall
cause Dr. Schwaeble and Dr. Stover to each execute this Agreement to confirm their agreement
to be bound to the same extent as Leicester with respect to all relevant provisions of this
Agreement.
	 
	10.5	 	Leicester represents and warrants that it is the owner of all right, title and interest in
any and all inventions that were made wholly or jointly by Dr. Fujita that are included within
the Leicester IP, has obtained an assignment from Dr. Fujita together with a release of all
such rights from Fukushima, has provided to Omeros a true copy of such assignment and release,
is under no restriction or obligation with respect to Dr. Fujita or Fukishima that is
inconsistent in any way with Leicester’s obligations under this Agreement, and that Omeros
shall have no obligation to compensate Dr. Fujita or Fukushima as the result of Omeros’
exercise of its rights and fulfillment of its obligations under this Agreement.
	 
	10.6	 	Subject to [†] as discussed in Section 10.1 above, Leicester represents and warrants
to Omeros that as far as it is aware, after having used reasonable efforts to ascertain
relevant facts and having formed a reasonable belief as to their truth, it has the lawful
right to grant the licenses conveyed under this Agreement, and that the Leicester IP and the
Joint IP are unencumbered by any third party obligation, commitment, restriction or license.
[†].





 





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	10.7	 	[†], Leicester warrants that it is not aware of any third party rights that
would be infringed as a result of Omeros’ fulfilling the terms of this Agreement.
	 
	10.8	 	Leicester has and will maintain reasonably adequate insurance coverage for employment
practices and general liability for all its activities under this Agreement.
	 
	10.9	 	THE WARRANTIES SET FORTH EXPRESSLY IN THIS AGREEMENT ARE THE SOLE
WARRANTIES MADE BY EITHER PARTY TO THE OTHER AND THERE ARE NO OTHER WARRANTIES,
REPRESENTATIONS OR GUARANTEES OF ANY KIND WHATSOEVER, EITHER EXPRESS OR IMPLIED, REGARDING THE
LICENSED PRODUCTS, THE LICENSED RESEARCH PRODUCTS, OR OTHER PRODUCTS, INCLUDING
WITHOUT LIMITATION ANY EXPRESS OR IMPLIED WARRANTIES OF MERCHANTABILITY OR FITNESS FOR A
PARTICULAR PURPOSE.
	 
	11	 	Confidentiality
	 
	11.1	 	Leicester and Omeros hereby affirm and incorporate by reference the terms of the Mutual
Nondisclosure Agreement between the parties dated September 23, 2003 concerning the subject
matter of this Agreement, a copy of which is attached hereto as Exhibit C, except to the
extent that the terms of such nondisclosure agreement may conflict with the terms of this
Agreement, in which case the terms of this Agreement shall prevail. The parties further agree
that the mutual obligations of nondisclosure and non-use set forth in such Mutual
Nondisclosure Agreement shall subsist for a period of five (5) years after the termination of
this Agreement.
	 
	11.2	 	The terms of this Agreement shall be maintained in strict confidence by both Leicester and
Omeros, and may not be disclosed by either party without the consent of the other party,
except as may be required under a court order or decree or as required to comply with any
governmental law, rule or regulation, and Omeros may disclose the terms of this Agreement to
Omeros’ current and potential employees, directors, consultants, shareholders, investors and
corporate partners.
	 
	12	 	Indemnification
	 
	12.1	 	Each party (the “Indemnifying Party”) shall indemnify, hold harmless and defend the other
party and its employees, officers, directors, consultants and agents (the “Indemnified Party”)
against any and all claims, suits, losses, liabilities, damages, costs, fees, and expenses
(“Claims”) resulting from or arising directly out of the Indemnifying Party’s breach of any
representation, warranty or obligation under this Agreement, or the Indemnifying Party’s
exercise of the rights and obligations under this license or any sublicense, except that such
obligation to indemnify, hold harmless and defend shall not extend to any Claims to the extent
such Claims result from or arise directly from the negligence or misconduct of the Indemnified
Party. This indemnification does not include any indemnity in relation to product performance
or product liability, and furthermore does not include any incidental, consequential or
special damages.





 





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	13	 	Enforcement of Patent Rights
	 
	13.1	 	If either party learns of the infringement of any patent or other intellectual property right
included in the Leicester IP or the Joint IP, that party shall promptly notify the other party
of such infringement and will provide the other party with all evidence of infringement in the
notifying party’s possession. Both parties shall use their best efforts in cooperation with
each other to terminate third party infringement without litigation.
	 
	13.2	 	Omeros shall have the sole right at its discretion to enforce the Leicester IP and the Joint
IP against third party infringers, including the initiation of any civil action in Omeros’
name, at Omeros’ sole cost, in which event any award, judgment, settlement or damages
collected shall belong solely to Omeros without duty to account to Leicester. In the event
that it is necessary for Omeros to join Leicester as a party to any such civil action,
Leicester shall join such action for no additional compensation but at Omeros’ sole expense,
and any award, judgment, settlement or damages collected shall belong solely to Omeros without
duty to account to Leicester.
	 
	13.3	 	If Omeros unreasonably declines to initiate enforcement of the Leicester IP and the Joint IP
against any third party infringer within ninety (90) days of a written demand from Leicester
to do so, then Leicester shall have the sole right at its discretion to enforce the Leicester
IP and the Joint IP against such third party infringer, including the initiation of any civil
action in Leicester’s name, at Leicester’s sole cost, in which event any award, judgment,
settlement or damages collected shall belong solely to Leicester without duty to account to
Omeros.
	 
	14	 	Term and Termination
	 
	14.1	 	Unless terminated earlier as set forth in Section 14.2 or 14.3 herein below, this Agreement
shall subsist so long as there is any pending patent application within the Leicester IP or
the Joint IP, any patent application in the process of being prepared for filing as agreed to
by Omeros and Leicester or any valid and subsisting claim included within any patent, utility
model or inventor’s certificate within the Leicester IP or the Joint IP (the “License Term”).
	 
	14.2	 	Omeros may terminate this Agreement by providing ninety (90)-days advance written notice of
termination under this Section 14.2 to Leicester, with or without cause, [†].
	 
	14.3	 	Either party may terminate this Agreement at any time in the event that the other party
(a) breaches any material obligation of this Agreement by first submitting written notice of
breach to the breaching party, which breach is not substantially cured within ninety (90)
days of the receipt of such notice, followed by written notice of termination then being
sent to the breaching party, or (b) declares or is adjudged by a court of competent
jurisdiction to be insolvent, bankrupt or in receivership, and such insolvency, bankruptcy
or receivership materially limits such party’s ability to perform its obligation under this
Agreement, excluding reorganizations entered into by such party with the consent of the
other party, which consent shall not be unreasonably withheld.





 





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	14.4	 	Omeros may at any time terminate its sponsorship of the Sponsored Research by providing
ninety (90)-days advance written notice of termination under this Section 14.4 to Leicester,
with or without cause, at any time, in which event Sections 2.1 — 2.3 herein shall cease to be
effective, and Sections 2.4 and 2.5 shall cease to be effective after all reports are provided
and accepted and all payments are made for Sponsored Research performed in accordance with the
applicable Research Plan prior to such notice, but the remainder of this Agreement shall
continue in full force and effect for the License Term, including all rights and obligations
of both parties hereunder. In the event of Omeros’ termination of its sponsorship of the
Sponsored Research under this Section 14.4, Omeros shall pay to Leicester any and all
non-cancelable sums reasonably incurred or committed to by Leicester prior to receipt of the
notice of termination.
	 
	14.5	 	The provisions of Sections 2.6 (Publication), 3 (Ownership of Intellectual Property), 4.2 –
4.6 (License as applicable to Joint IP and right of first refusal), 8 (Patent Prosecution as
applicable to Joint IP), 9 and 10 (Representations and Warranties and Other Obligations), 11
(Confidentiality), 12 (Indemnification), 13 (Enforcement as applicable to Joint IP), 15 (Use
of Names) and 16 (Miscellaneous) above shall survive expiration or termination of this
Agreement for the period set forth therein or, if no period is set forth therein, then
indefinitely.
	 
	15	 	Use of Names
	 
	15.1	 	Nothing contained in this Agreement confers any right to either party to use in advertising,
publicity, or other promotional activities any name, trade name, trademark, or other
designation of the other party hereto, and neither party shall make such use without the prior
written consent of the other party, provided however Omeros may through written, oral or
electronic communication disclose the existence of this Agreement and the names of Leicester,
Dr. Schwaeble, Dr. Stover, Dr. Fujita and other of Leicester’s employees and consultants to
Omeros’ current and potential employees, directors, consultants, shareholders, investors and
corporate partners, and as required to comply with any governmental law, rule or regulation.
	 
	16	 	Miscellaneous
	 
	16.1	 	This Agreement including all appendices and exhibits attached thereto or incorporated by
reference therein constitutes the entire understanding of the parties hereto regarding the
subject matter of this Agreement, and no other representation, agreement, promise or
undertaking altering, modifying, taking from or adding to the terms of this Agreement shall
have any effect unless the same is reduced to writing and duly executed by the parties hereto.
In the event of any conflict between the main body of this Agreement and any attachments
thereto or documents incorporated by reference therein, the provisions of the main body of
this Agreement shall control.
	 
	16.2	 	Either party’s failure to enforce any provision of this Agreement will not be considered a
waiver of future enforcement of that or any other provision.





 





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	16.3	 	The laws of the state of Delaware, United States, without regard to its conflict-of-laws
provisions, shall govern this Agreement, its interpretation and its enforcement, and any
disputes arising out of or related to this Agreement.
	 
	16.4	 	The parties agree that, except as provided herein below, any claim or controversy arising out
of or relating to this Agreement or breach thereof shall be settled by arbitration in the
state of Delaware, United States, in accordance with the commercial rules of the American
Arbitration Association by a panel of three arbitrators, one selected by each party and the
third selected by the other two arbitrators. In any such arbitration proceeding, judgment
upon the award rendered by the arbitrator shall be final and binding upon the parties and may
be entered by either party in any court or forum of competent jurisdiction as provided herein
below. Notwithstanding the foregoing, both parties agree that any claims or controversies
concerning the validity or enforceability of any intellectual property, or the actual or
threatened disclosure or misuse of confidential information, may alternately be resolved by a
civil action in any court of competent jurisdiction as provided herein below, and both parties
further agree that each shall retain the right to seek injunctive relief in any court of
competent jurisdiction as provided herein below to prevent a breach, threatened breach or
continuing breach of this Agreement which would cause irreparable injury (e.g., breaches of
confidentiality or the like).
	 
	16.5	 	Any civil action prosecuted or instituted by either party as permitted herein above with
respect to any matters arising out of or related to this Agreement shall be brought in either
the United States District Court located in the state of Delaware, United States (if federal
subject matter jurisdiction therein lies) or the Superior Court for the state of Delaware,
United States (if there is no subject matter jurisdiction in federal court), and each party
hereby consents to the jurisdiction and venue of such courts for such purposes.
	 
	16.6	 	In the event that it is necessary for either party of this Agreement to take legal action to
enforce any of the terms, conditions or rights contained herein, or to defend any such action,
then the prevailing party in such action shall be entitled to recover from the other party all
reasonable attorneys fees, costs and expenses related to such legal action.
	 
	16.7	 	In the event that any portion of this Agreement is held invalid or unenforceable by a court
of law, that provision will be construed and reformed to permit enforcement of the provision
to the maximum extent permissible consistent with the parties’ original intent, and if such
construction is not possible, such provision shall be struck from this Agreement, and the
remainder of the Agreement shall remain in full force and effect as if such provision had
never been part of this Agreement.
	 
	16.8	 	For the purposes of this Agreement, the parties hereto are independent contractors, and
nothing in this Agreement shall be construed to place them in the relationship of partners,
principal and agent, employer/employee or joint venturers. Except as provided expressly
herein, each party agrees that it shall have no authority to bind or obligate the other party,
nor shall any party hold itself out as having such authority.





 





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	16.9	 	Neither party will be liable for failure or delay in performing any obligation under this
Agreement, or will be considered in breach of this Agreement, if such failure or delay is
due to a natural disaster or any cause reasonably beyond such party’s control, provided that
such party resumes performance as soon as possible following the end of the event that
caused such delay or failure of performance.
	 
	16.10	 	Neither party may assign this Agreement, or any obligation or right under this Agreement, in
whole or in part, without the other party’s prior written consent, which consent will not be
unreasonably withheld. This Section shall not be construed in any way to limit Omeros’ rights
to grant, at Omeros’ sole discretion, sublicenses hereunder. Leicester consents to Omeros’
assignment of this Agreement in whole or in part in connection with the merger, consolidation
or transfer of all or substantially all of that portion of Omeros’ assets to which this
Agreement relates. Subject to these restrictions, this Agreement will be binding upon and
will inure to the benefit of the parties’ permitted successors and assignees.
	 
	16.11	 	Any notice required or permitted to be given hereunder by either party shall be in writing
and shall be (a) delivered personally, (b) sent by registered mail, return receipt requested,
postage prepaid, (c) sent by an internationally recognized courier service guaranteeing
next-day delivery, charges prepaid, or (d) delivered by facsimile (with the original promptly
sent by any of the foregoing manners) to the addresses or facsimile numbers of the other party
set forth below, or at such other addresses as may from time to time be furnished by similar
notice by either party. The effective date of any notice hereunder shall be the date of
receipt by the receiving party.





	 	 	 
	If to Omeros:

	 	If to Leicester:
	 
	 	 
	Omeros Corporation

	 	University of Leicester
	1420 Fifth Avenue, Suite 2600

	 	University Road
	Seattle, WA 98101

	 	Leicester, LE1 7RH
	U.S.A.

	 	United Kingdom
	 
	 	 
	Attention: Gregory A. Demopulos, M.D.,

	 	Attention: Research and
	Chairman & CEO

	 	Business Development Office
	 
	 	 
	And copy to: Marcia S. Kelbon,
	 	 
	Patent & General Counsel
	 	 
	 
	 	 
	Fax: (206) 264.7856

	 	Fax: +44 (0) 116.252.2028
	Phone: (206) 623.4688

	 	Phone: +44 (0) 116.252.2347







	16.12	 	This Agreement may be executed in one or more counterparts, each of which will be considered
an original, and all of which will constitute the same instrument.





 





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     IN WITNESS WHEREOF, Omeros and Leicester have each acknowledged and accepted this Agreement by
causing it to have been signed by their respective duly authorized officials.



	 	 	 	 	 	 	 	 	 
	OMEROS CORPORATION	 	UNIVERSITY OF LEICESTER	 	 
	 
	 	 	 	 	 	 	 	 
	By:

	 	/s/ Gregory A. Demopulos
 

	 	By:
	 	/s/ Clare O’Neill
 

	 	 
	 
	 	 	 	 	 	 	 	 
	Name:

	 	Gregory A. Demopulos, M.D.
	 	Name:
	 	Clare O’Neill	 	 
	 

	 	 	 	 	 	 

	 	 
	 
	 	 	 	 	 	 	 	 
	Title:

	 	Chairman & CEO
	 	Title:
	 	Business Development Manager	 	 
	 

	 	 	 	 	 	 

	 	 
	 
	 	 	 	 	 	 	 	 
	Date:

	 	7/6/04
	 	Date:
	 	
10th June 2004	 	 
	 

	 	 

	 	 	 	 

	 	 
	 
	 	 	 	 	 	 	 	 
	Fax:

	 	206.264.7856
	 	Fax:
	 	0044 116 252 2028	 	 
	 

	 	 	 	 	 	 

	 	 






     The above Exclusive License and Sponsored Research Agreement is acceptable to the
undersigned investigators, who agree to abide by the terms set forth therein.



	 	 	 	 	 	 	 	 	 
	WILHELM J. SCHWAEBLE, PH.D.	 	CORDULA M. STOVER, PH.D.	 	 
	 
	 	 	 	 	 	 	 	 
	Signed:

	 	/s/ Wilhelm J. Schwaeble
	 	Signed:
	 	/s/ Cordula M. Stover	 	 
	 

	 	 
	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	Title:

	 	Professor of Immunology
	 	Title:
	 	Lecturer in Immunology	 	 
	 

	 	 
	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	Date:

	 	10/06/04
	 	Date:
	 	10 June 04	 	 
	 

	 	 
	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	Fax:

	 	0044-116-252-5030
	 	Fax:
	 	0044-116-252-5030	 	 
	 

	 	 
	 	 	 	 	 	 





 





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EXHIBIT A




To the Exclusive License and Sponsored Research Agreement




Between Omeros Corporation and the University of Leicester




PATENT APPLICATION




 





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EXHIBIT B




To the Exclusive License and Sponsored Research Agreement




Between Omeros Corporation and the University of Leicester




RESEARCH PLAN




1st-Year Research Program Outline – Omeros and University of Leicester




     The following are the research aims of the Sponsored Research program for the first year. All
activities to meet the aims are to be carried out by Leicester (“Dr. Schwaeble’s lab”) except for
those aims noted for performance by Omeros, other investigators or contractors. Aims indicated as
to be performed by Omeros or third parties are provided herein for reference purposes only and
shall not be interpreted as any obligation on the part of Omeros. Specific aims and corresponding
timeline may be modified as mutually agreed in writing by Dr. Wilhelm Schwaeble and Omeros.



     Aims as set forth will extend into a second year of the Sponsored Research Program.



     Specific Aims:



     [†]




 





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EXHIBIT C




To the Exclusive License and Sponsored Research Agreement




Between Omeros Corporation and the University of Leicester




MUTUAL CONFIDENTIALITY AGREEMENT




 





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