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EXHIBIT 10.10

OMEROS CORPORATION

SECOND AMENDED AND RESTATED EMPLOYMENT AGREEMENT

     This Second Amended and Restated Employment Agreement (the “Agreement”) is dated as of
December 30, 2007 (the “Effective Date”) by and between Dr. Gregory A. Demopulos
(“Employee”) and Omeros Corporation, a Washington corporation (the “Company”), and
amends and restates in its entirety the Employment Agreement between Employee and the Company dated
as of December 11, 2001, as amended and restated on June 15, 2005, and the Amended and Restated
Employment Agreement between Employee and the Company dated as of December 12, 2006.

     1. Term of Agreement.

          (a) Subject to the provisions of Section 3, this Agreement shall commence on the date hereof
and shall continue until terminated by either party. The period of the Employee’s employment
hereunder is hereinafter referred to as the “Employment Period.” The Company’s obligations
under Sections 4(c), 5, 10 and 11(i) shall survive the termination of this Agreement, as will the
Employee’s obligations under Section 9.

          (b) On or before May 1, 2009, Employee and the Company shall execute a new employment
agreement acceptable to Employee, and on customary market terms consistent with those for chief
executive officers of similarly situated companies, relating to the terms and conditions of
Employee’s future employment by the Company (including, without limitation, severance protection
and the award of stock or stock options).

     2. Duties.

          (a) Position. Employee shall be employed as President and Chief Executive Officer of
the Company. Employee will report to the Company’s Board of Directors (the “Board”), and
all other employees of the Company will report, directly or indirectly, to Employee.

          (b) Obligations to the Company. Employee agrees to the best of his ability and
experience that he will at all times loyally and conscientiously perform all of the duties and
obligations required of him. During the Employment Period, Employee will devote all of his
business time and attention to the business of the Company, will not render commercial or
professional services of any nature to any person or organization, whether or not for compensation,
without the prior written consent of the Board, and will not directly or indirectly engage or
participate in any business that is competitive in any manner with the business of the Company;
provided, that, notwithstanding the foregoing, Employee may:

               (i) devote such time to clinical practice and related activities as he reasonably deems
necessary to maintain his status as a board-eligible orthopedic and hand and microvascular surgeon,
and Employee will be entitled to all of the benefits and profits arising therefrom or incident
thereto; and

 

 

               (ii) serve on the boards or other governing bodies of, or otherwise participate in the
activities of, charitable and other not-for-profit or community organizations, and in connection
therewith accept and retain honoraria, speaking fees and the like; and

               (iii) invest (whether or not passively) and otherwise be involved in (through the provision of
services or otherwise) one or more ventures, however organized or owned, that have as a business
objective the development and/or commercial exploitation of an electronic system of reporting
medical test results, so long as such involvement does not require his participation in the daily
operations of such venture or ventures or materially interfere with the performance of his duties
to the Company; and

               (iv) with the consent of the Board (which consent shall not be unreasonably withheld), serve
on the boards or other governing bodies of businesses or organizations not described in (ii) or
(iii) above.

The ownership by Employee of not more than 1% of the outstanding equity securities of a corporation
whose stock is listed on a national stock exchange or the Nasdaq National Market shall in no event
be treated as directly or indirectly engaging or participating in a competitive business. (For the
avoidance of doubt, the immediately preceding sentence shall not be construed as limiting in any
way Employee’s investment or involvement as described in clause (iii) above.) To the extent
consistent with the foregoing, Employee will also comply with and be bound by the Company’s
operating policies, procedures and practices from time to time in effect during the Employment
Period.

     3. At-Will Employment. The Company and Employee acknowledge that Employee’s
employment is and shall continue to be at-will, as defined under applicable law, and that
Employee’s employment with the Company may be terminated by either party at any time for any or no
reason. If Employee’s employment terminates for any reason, Employee shall not be entitled to any
benefits other than as provided in this Agreement or applicable law.

     4. Compensation. For the duties and services to be performed by Employee hereunder,
the Company shall pay Employee, and Employee agrees to accept, the following:

          (a) Salary and Bonus.

               (i) Base Salary. Effective as of January 1, 2007, Employee shall receive base salary
at an annual rate of $475,000 or such higher annual rate as the Board or its Compensation Committee
may approve (“Base Salary”), payable in accordance with the Company’s payroll practices for
executive employees but not less frequently than semi-monthly. The Compensation Committee shall
review Employee’s Base Salary not less frequently than annually, beginning the earlier of January
1, 2008 or the period for annual reviews for all employees of the Company, and may increase it but,
except for a reduction consistent with an across-the-board reduction in the base compensation
payable to other executive employees, may not decrease it, without the consent of Employee. In
addition, Employee’s total cash compensation from Base Salary and bonuses (disregarding the bonus
described in the first sentence of Section 4(a)(ii) below)

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may never be less, for any fiscal year
of the Company, than the highest total cash compensation from
base salary and bonuses (excluding sales commissions) paid or payable for such year to any
other executive employee of the Company. For purposes of this Agreement, an “executive employee”
is any employee with the title “director” or more senior.

               (ii) Bonuses. On or before December 31, 2007, the Company will pay to Employee a
bonus of $167,147.45 (less applicable withholding taxes) as a one-time bonus. In addition, for
each fiscal year of the Company beginning on or after January 1, 2008, Employee shall be entitled
to participate in all bonus and incentive plans or programs, if any, of the Company, in each case
at a level and on terms commensurate with his position, it being understood that a reduction in
base salary may be a prerequisite for Employee to participate in any bonus or incentive plan or
program, so long as other executives of the Company who participate in such bonus or incentive plan
or program are also subject to a proportional or greater reduction in base salary.

          (b) Additional Benefits. Employee will be eligible to participate in the Company’s
employee benefit and fringe benefit plans and programs of general application and in any other
employee benefit and fringe benefit plans and programs of the Company that are made available to
other executive employees of the Company, including without limitation those plans covering
medical/dental, disability and life insurance, in accordance with the rules established for
individual participation in any such plan or program and under applicable law and, in each case, on
terms that are not less favorable to Employee than the terms applicable to other executive
employees of the Company. Employee will be eligible for not less than four weeks of vacation per
year and for sick leave in accordance with the Company’s policies in effect during the Employment
Term, and will receive such other benefits as the Company generally provides to its other employees
of comparable position and experience. In addition to and not in lieu of the foregoing, the
Company shall bear the costs incurred by Employee in maintaining his status as a board-eligible
orthopedic and hand and microvascular surgeon, including, without limitation, payment of Employee’s
malpractice insurance and professional fees.

          (c) Reimbursement of Expenses; Insurance. Subject to substantiation in accordance
with Company policies, Employee shall be promptly reimbursed by the Company for all reasonable
expenses that he incurs in the course of his employment hereunder. During the Employment Period
and thereafter, Employee shall be indemnified by the Company to the fullest extent permitted by law
against all liability with respect to acts or omissions by Employee during the course of his
employment with the Company (including for this purpose any service on the Board), and the Company
shall maintain in force adequate insurance covering such acts or omissions.

     5. Termination of Employment and Severance Benefits.

          (a) Termination of Employment. Employee’s employment, and with it the Employment
Period, shall terminate upon the first to occur of the following:

               (i) The Company’s termination of Employee’s employment for Cause (as defined in Section 7(a)
below) (“Termination for Cause”);

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               (ii) The Company’s termination of Employee’s employment for Disability (as defined in Section
7(d) below) (“Disability Termination”);

               (iii) The Company’s termination of Employee’s employment other than a Termination for Cause or
a Disability Termination (“Termination Without Cause”).

               (iv) The termination by Employee of his employment for Good Reason (as defined in Section 7(b)
below) or any other termination by Employee that is treated as a Constructive Termination under
Section 7(b) below (“Constructive Termination”).

               (v) The termination by Employee of his employment other than for Good Reason (“Voluntary
Termination”).

               (vi) Termination of Employee’s employment by reason of death.

The effective date of Employee’s termination (the “Date of Termination”) shall be (A) in
the case of a termination under clause (vi) above, the date of death, and (B) in every other case,
the date on which the Company (in the case of termination described in clauses (i), (ii) or (iii)
above) or Employee (in the case of clauses (iv) and (v) above) gives the other party notice of
termination or, if a later date is specified in such notice, such later date.

          (b) Severance Benefits. Employee shall be entitled to receive severance benefits upon
termination of employment only as set forth in this Section 5(b):

               (i) Voluntary Termination. If Employee’s employment terminates by Voluntary
Termination, then Employee shall not be entitled to receive payment of any severance benefits.
Employee will be entitled to prompt payment of all Base Salary, bonuses (including, without
limitation, the full amount of any milestone or incentive payments achieved by Employee at or prior
to the Date of Termination) and vacation earned but not yet paid as of the Date of Termination, and
Employee’s benefits will be continued under the Company’s then existing benefit plans and programs
in accordance with such plans and programs in effect on the Date of Termination and in accordance
with applicable law.

               (ii) Involuntary Termination. If Employee’s employment is terminated by the Company
in a Termination Without Cause or by Employee in a Constructive Termination, Employee will be
entitled to receive all amounts he would have received in the event of a Voluntary Termination plus
the following severance benefits (“Severance Benefits”):

                    (x) until the earlier of (I) the last day of the two year period beginning on the Date of
Termination and (II) Employee’s start date with a new employer that pays Employee base salary equal
to or in excess of his Base Salary in effect immediately prior to the Date of Termination (or, in
the event of any purported decrease in Base Salary prior to the Date of Termination, which
purported decrease was a stated cause for Constructive Termination by Employee, base salary equal
to or in excess of his Base Salary in effect immediately prior to such purported decrease) (the
“Severance Period”), salary continuation at an annual rate equal to the sum

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of (a) the rate
of Base Salary in effect immediately prior to the Date of Termination (or, in the event of any
purported decrease in Base Salary prior to the Date of Termination, which purported decrease was a
stated cause for Constructive Termination by Employee, at the rate in effect immediately prior to
such purported decrease), plus (b) the greater of (i) if any portion of Employee’s remuneration
during the two-year period preceding the calendar year in which the Date of Termination falls
was paid or payable as a bonus, the annual average of the aggregate of such bonus amounts, or (ii)
for the calendar year in which the Date of Termination falls, any bonus to which Employee would
have been entitled for such year if his employment had not been terminated, as determined by the
Board in good faith. Such salary continuation payments shall be paid on the same periodic basis as
payments of base salary are paid to executive employees of the Company, but not less frequently
than semi-monthly. The severance payments described in this clause (x) shall not be subject to
offset for other earnings.

                    (y) during the Severance Period, continued participation by Employee and his eligible
dependents in all medical, dental, optical and mental health benefit plans or programs of the
Company, in each case as in effect immediately prior to the Date of Termination (or, in the event
of any purported decrease in coverage occurring prior to the Date of Termination, as in effect
immediately prior to such purported decrease) and in each case on terms not less favorable to
Employee and his eligible dependents than the terms applicable to active executive employees of the
Company and their eligible dependents, unless comparable coverage is provided by Employee’s new
employer.

                    (z) full and immediate vesting and accelerated exercisability of all stock options held by
Employee immediately prior to the Date of Termination and full and immediate vesting of all shares
of stock of the Company previously acquired by Employee or purchasable under any such stock option;
provided, that Employee shall have until the maximum term of the option to exercise any stock
option that had not been exercised prior to the Date of Termination.

               (iii) Termination for Cause. If Employee’s employment is terminated by the Company in
a Termination for Cause, then Employee shall not be entitled to receive payment of any severance
benefits. Employee will be entitled to prompt payment of all Base Salary, bonuses and vacation
earned but not yet paid as of the Date of Termination, and Employee’s benefits will be continued
under the Company’s then existing benefit plans and programs in accordance with such plans and
programs in effect on the Date of Termination and in accordance with applicable law.

               (iv) Termination by Reason of Death or Disability. In the event that Employee’s
employment with the Company terminates as a result of Employee’s death or a Disability Termination,
Employee (or Employee’s estate or personal representative) will be entitled to prompt payment of
all Base Salary, bonuses and vacation earned but not yet paid as of the Date of Termination and any
other benefits payable under the Company’s then existing benefit plans and policies in accordance
with such plans and policies in effect on the date of death or Disability and in accordance with
applicable law.

     6. Section 409A.

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          (a) Notwithstanding anything to the contrary in this Agreement, if Employee is a “specified
employee” within the meaning of Section 409A of the Code and the final regulations and any other
guidance promulgated thereunder (“Section 409A”) at the time of his termination, and the Deferred
Compensation Separation Benefits will not and could not under any circumstances,
regardless of when such termination occurs, be paid in full by the later of (i) March 15 of
the year following Employee’s termination, or (ii) fifteenth day of the third month of the
Company’s fiscal year following Employee’s termination, then only that portion of the Deferred
Compensation Separation Benefits which do not exceed the Section 409A Limit (as defined below) will
be made within the first six (6) months following Employee’s termination of employment in
accordance with the payment schedule applicable to each such payment or benefit. For these
purposes, each severance payment and benefit is hereby designated as a separate payment and will
not collectively be treated as a single payment. Any portion of the Deferred Compensation
Separation Benefits in excess of the Section 409A Limit shall accrue and, to the extent such
portion of the Deferred Compensation Separation Benefits would otherwise have been payable within
the first six (6) months following Employee’s termination of employment, will become payable on the
first payroll date that occurs on or after the date six (6) months and one (1) day following the
date of Employee’s termination of employment. All subsequent Deferred Compensation Separation
Benefits, if any, will be payable in accordance with the payment schedule applicable to each
payment or benefit.

          (b) This provision is intended to comply with the requirements of Section 409A so that none of
the Severance Benefits to be provided hereunder will be subject to the additional tax imposed under
Section 409A, and any ambiguities herein will be interpreted to so comply. The Company and
Employee agree to work together in good faith to consider amendments to this Agreement and to take
such reasonable actions which are necessary, appropriate or desirable to avoid imposition of any
additional tax or income recognition prior to actual payment to Employee under Section 409A.

     7. Definition of Terms. The following terms referred to in this Agreement shall have
the following meanings:

          (a) Cause. For purposes of this Agreement, “Cause” for Employee’s termination will
exist at any time after the happening of one or more of the following events:

               (i) Employee’s willful misconduct or gross negligence in performance of his or her duties
hereunder, including Employee’s refusal to comply in any material respect with the legal directives
of the Board so long as such directives are not inconsistent with Employee’s position and duties,
and such refusal to comply is not remedied within 10 working days after written notice from the
Board, which written notice shall state that failure to remedy such conduct may result in
Termination for Cause;

               (ii) Dishonest or fraudulent conduct that materially discredits the Company, a deliberate
attempt to do an injury to the Company, or conduct that materially discredits the Company or is
materially detrimental to the reputation of the Company, including conviction of a felony; or

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               (iii) Employee’s material breach, if incurable, of any element of the Company’s Confidential
Information and Invention Assignment Agreement, including without limitation, Employee’s theft or
other misappropriation of the Company’s proprietary information.

          (b) Constructive Termination. For purposes of this Agreement, “Constructive
Termination” means Employee’s termination of his employment within 120 days following the
occurrence of Good Reason. For purposes of this Agreement, “Good Reason” means any of the
following: (i) any material diminution in Employee’s authority, duties or responsibilities; (ii)
any material diminution in Base Salary; (iii) any material change in the geographic location at
which Employee must perform services (in other words, the relocation of Employee to a principal
work location that is more than 50 miles from the Company’s location on the Effective Date); and
(iv) any other action or inaction that constitutes a material breach by the Company of this
Agreement.

     Provided, however, that before Employee may terminate his employment in a Constructive
Termination, (A) Employee must provide the Company with written notice within 90 days of the event
that Employee believes constitutes “Good Reason” specifically identifying the acts or omissions
constituting the grounds for Good Reason and (B) the Company must have an opportunity within 30
days following delivery of such notice to cure the Good Reason condition.

          (c) Deferred Compensation Separation Benefits. For purposes of this Agreement,
“Deferred Compensation Separation Benefits” shall mean the Severance Benefits payable to
Employee, if any, pursuant to this Agreement, together with any other severance payments or
separation benefits which may be considered deferred compensation under Section 409A.

          (d) Disability. For purposes of this Agreement, “Disability” shall mean that
Employee has been unable to perform his or her duties hereunder as the result of his or her
incapacity due to physical or mental illness, and such inability, which continues for at least 120
consecutive calendar days or 150 calendar days during any consecutive twelve-month period, if
shorter, after its commencement, is determined to be total and permanent by a physician selected by
the Company and its insurers and acceptable to Employee or to Employee’s legal representative (with
such agreement on acceptability not to be unreasonably withheld).

          (e) Section 409A Limit. For purposes of this Agreement, “Section 409A Limit”
shall mean the lesser of two (2) times: (i) Employee’s annualized compensation based upon the
annual rate of pay paid to Employee during the Company’s taxable year preceding the Company’s
taxable year of Employee’s termination of employment as determined under Treasury Regulation
1.409A-1(b)(9)(iii)(A)(1) and any Internal Revenue Service guidance issued with respect thereto; or
(ii) the maximum amount that may be taken into account under a qualified plan pursuant to Section
401(a)(17) of the Code for the year in which Employee’s employment is terminated.

     8. Confidentiality Agreement. Employee shall sign, or has signed, a Confidential
Information and Invention Assignment Agreement (the “Confidentiality Agreement”)
substantially in the form attached hereto as Exhibit A. Employee hereby represents and
warrants to the Company that he or she has complied with all obligations under the Confidentiality
Agreement and agrees to continue to abide by the terms of the Confidentiality Agreement and further
agrees that the

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provisions of the Confidentiality Agreement shall survive any termination of this
Agreement or of Employee’s employment relationship with the Company.

     9. Noncompetition Covenant. Employee hereby agrees that he or she shall not, during
the Employment Period and until the later of (i) the end of the Severance Period, if any, and (ii)
one
year after the Date of Termination, do any of the following without the prior written consent
of the Board:

          (a) Compete. Carry on any business or activity (whether directly or indirectly, as a
partner, stockholder, principal, agent, director, affiliate, employee or consultant) which is
directly competitive with the business conducted by the Company (as conducted now or during the
term of Employee’s employment), nor engage in any other activities that conflict with Employee’s
obligations to the Company. The parties acknowledge and agree that Employee shall not be deemed to
have breached his undertakings under this Section 9 by reason of engaging, whether during the
Employment Period or thereafter, in any or any combination of the activities described as permitted
activities under Section 2(b), including, for the avoidance of doubt but without limitation,
Section 2(b)(iii).

          (b) Solicit Business. Solicit or influence or attempt to influence any client or
customer, either directly or indirectly, to direct his or its purchase of the Company’s products
and/or services to any person, firm, corporation, institution or other entity in competition with
the business of the Company.

          (c) Solicit Personnel. During the term of this Agreement and until the later of (i)
the end of the Severance Period and (ii) one year after the Date of Termination, solicit or
influence or attempt to influence any person employed by the Company to terminate or otherwise
cease his employment with the Company or become an employee of any competitor of the Company. This
Section 9(c) is to be read in conjunction with Section 6 of the Confidential Information and
Invention Assignment Agreement executed by Employee.

     10. Successors. This Agreement shall be binding on the Company and its successors and
assigns. Without limiting the foregoing, the Company shall require any successor (whether direct
or indirect and whether by purchase, lease, merger, consolidation, liquidation or otherwise) to all
or substantially all of the Company’s business and/or assets to assume the Company’s obligations
under this Agreement and to agree expressly to perform the Company’s obligations under this
Agreement in the same manner and to the same extent as the Company would be required to perform
such obligations in the absence of a succession. The terms of this Agreement and all of Employee’s
rights hereunder shall inure to the benefit of, and be enforceable by, Employee’s personal or legal
representatives, executors, administrators, successors, heirs, distributees, devisees and legatees.

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     11. Miscellaneous Provisions.

          (a) No Duty to Mitigate. Employee shall not be required to mitigate the amount of any
payment contemplated by this Agreement (whether by seeking new employment or in any other manner).

          (b) Amendments and Waivers. Any term of this Agreement may be amended or waived only
with the written consent of the parties.

          (c) Sole Agreement. This Agreement, including Exhibit A hereto, constitutes the sole
agreement of the parties and supersedes all oral negotiations and prior writings with respect to
the subject matter hereof. In particular, this Agreement shall supersede any terms contained
in stock option agreements provided to Employee or in any exhibits to this Agreement, in each case
that are contrary to the terms hereof; provided, for the avoidance of doubt, that subject to the
last sentence of Section 4(b), nothing in this Agreement shall be construed as adversely affecting
Employee’s rights under any stock option granted to him prior to the Effective Date.

          (d) Notices. Any notice required or permitted by this Agreement shall be in writing
and shall be deemed sufficient upon receipt, when delivered personally or by a
nationally-recognized delivery service (such as Federal Express or UPS), or 48 hours after being
deposited in the U.S. mail as certified or registered mail with postage prepaid, if such notice is
addressed to the party to be notified at such party’s address as set forth in the signature blocks
below or as subsequently modified by written notice.

          (e) Choice of Law. The validity, interpretation, construction and performance of this
Agreement shall be governed by the laws of the State of Washington, without giving effect to the
principles of conflict of laws.

          (f) Severability. If one or more provisions of this Agreement are held to be
unenforceable under applicable law, the parties agree to renegotiate such provision in good faith.
In the event that the parties cannot reach a mutually agreeable and enforceable replacement for
such provision, then (i) such provision shall be excluded from this Agreement, (ii) the balance of
the Agreement shall be interpreted as if such provision were so excluded and (iii) the balance of
the Agreement shall be enforceable in accordance with its terms.

          (g) Counterparts. This Agreement may be executed in counterparts, each of which shall
be deemed an original, but all of which together will constitute one and the same instrument.

          (h) Arbitration. Any dispute or claim arising out of or in connection with this
Agreement will be finally settled by binding arbitration in Seattle, Washington in accordance with
the rules of the American Arbitration Association by one arbitrator appointed in accordance with
said rules. The arbitrator shall apply Washington law, without reference to rules of conflicts of
law or rules of statutory arbitration, to the resolution of any dispute. Judgment on the award
rendered by the arbitrator may be entered in any court having jurisdiction thereof.
Notwithstanding the

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foregoing, the parties may apply to any court of competent jurisdiction for
preliminary or interim equitable relief, or to compel arbitration in accordance with this
paragraph, without breach of this arbitration provision. This Section 11(h) shall not apply to the
Confidentiality Agreement.

          (i) Legal Fees. The Company shall reimburse Employee for his legal fees incurred in
negotiating this Agreement. In addition, the Company shall pay all legal and other reasonable fees
and expenses that Employee may incur in connection with any action by Employee to obtain any
severance, coverage, reimbursement, remuneration or other payment or benefit asserted by Employee
in good faith to be owing to him under the Agreement, if Employee substantially prevails with
respect to any material claim brought in the arbitration.

          (j) Advice of Counsel. EACH PARTY TO THIS AGREEMENT ACKNOWLEDGES THAT, IN EXECUTING
THIS AGREEMENT, SUCH PARTY HAS HAD THE OPPORTUNITY TO SEEK THE ADVICE OF INDEPENDENT LEGAL COUNSEL,
AND HAS READ AND UNDERSTOOD ALL OF THE TERMS AND PROVISIONS OF THIS AGREEMENT. THIS AGREEMENT
SHALL NOT BE CONSTRUED AGAINST ANY PARTY BY REASON OF THE DRAFTING OR PREPARATION HEREOF.

(signature page follows)

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     The parties have executed this Agreement the date first written above.

	 	 	 	 	 
	 	OMEROS CORPORATION

 	 
	 	By:  	/s/ Marcia S. Kelbon	 
	 	Title: 	VP, Patent & General Counsel	 
	 	 	 	 

	 	 	 	 	 
	 	 Address:	1420 Fifth Avenue, Suite 2600
	 	 	Seattle, WA 98101	 
	 	 	 	 

	 	 	 	 	 
	 	GREGORY A. DEMOPULOS

 	 
	 	Signature:  	/s/ Gregory A. Demopulos, M.D.	 
	 

[SIGNATURE PAGE TO EMPLOYMENT AGREEMENT]

 

 

EXHIBIT A

CONFIDENTIAL INFORMATION AND

INVENTION ASSIGNMENT AGREEMENT

 

 

OMEROS MEDICAL SYSTEMS, INC.

EMPLOYEE PROPRIETARY INFORMATION AND INVENTIONS AGREEMENT

          In consideration for my becoming employed, or my employment being continued, by Omeros Medical
Systems, Inc. or its subsidiaries, affiliates, or successors (collectively, the “Company”),
and for any cash, equity or other compensation for my services, I hereby agree as follows:

	1.	 	Overall Duties. During my term of employment with the Company, I will perform for the
Company such duties as may be designated by the Company from time to time. I will devote my
best efforts to the interests of the Company and will not engage in other employment or in any
activities detrimental to the best interests of the Company without the prior written consent
of the Company.
	 
	2.	 	Company Intellectual Property.
	 
	2.1	 	Definitions. As used in this Agreement, the term “Intellectual Property” means
discoveries, developments, concepts, designs, ideas, know-how, improvements, inventions, trade
secrets and/or original works of authorship, and trademarks, whether or not patentable,
copyrightable or otherwise legally protectable. This includes, but is not limited to, any new
product, apparatus, article of manufacture, biological material, method, procedure, process,
technique, system, compound, formulation, composition of matter, design or configuration of
any kind, or any improvement thereon. As used in this Agreement, the term “Company
Intellectual Property” means all Intellectual Property that I may solely or jointly
create, conceive, develop or reduce to practice during the term of my employment with the
Company which (i) pertains to any current or planned line of business activity of the Company,
(ii) was aided by the use of time, material or facilities of the Company, whether or not
during working hours or (iii) relates to any of my work carried out for the Company, whether
or not during normal working hours. Company Intellectual Property shall not be interpreted to
include, and any assignment of inventions required by this Agreement does not apply to, any
invention or other proprietary right of mine which I have disclosed to the Board of Directors
of Omeros and which has been disclaimed thereby as being unrelated to and not in conflict with
the present future business or research of Omeros.
	 
	2.2	 	Duty to Disclose and Company Ownership. I agree to promptly disclose all Company
Intellectual Property to the Company, for no additional compensation. All Company
Intellectual Property shall be the sole property of the Company and its assigns to the maximum
extent permitted by law (and to the fullest extent permitted by law shall be deemed “works
made for hire”), and the Company and its successors and assigns shall be the sole owner of all
patents, copyrights, trademarks, trade secrets and other rights in connection therewith.
	 
	2.3	 	Assignment. I hereby assign and transfer to the Company, for no additional compensation, any
right and title to and interest in Company Intellectual Property that I may have or acquire,
including any copyrights and Registrations and renewals therefore, any inventions, any United
States, International and foreign patent applications filed on such inventions, the right to
apply for all such patent applications in my name or in the name of the Company, such Company
Intellectual Property to be held and enjoyed by the Company as entirely as the same would have
been held and enjoyed by me had this assignment and transfer not been made.
	 
	2.4	 	Assistance. I agree to provide all required or requested assistance to the Company to permit
the Company, at its expense but at no additional compensation to me, in obtaining and
enforcing the full benefits, enjoyment, rights and title throughout the world in Company
Intellectual Property, including but not limited to the review and execution of assignments
confirming ownership by the

 

 

	 	 	Company, declarations, powers of attorney, and other documents, and assistance or
cooperation in legal proceedings. I hereby irrevocably designate the Company and its duly
authorized officers and agents as my agent and attorney-in fact, to execute and file on my
behalf any such applications and to do all other lawful acts to further the prosecution and
issuance of patents, copyright and mask work registrations related to such Inventions. This
power of attorney shall not be affected by my subsequent incapacity.
	 
	2.5	 	Notice Required by Revised Code of Washington 49.44.140. Any assignment of inventions
required by this Agreement does not apply to an invention for which no equipment, supplies,
facility or trade secret information of the Company was used and which was developed entirely
on the employee’s own time, unless (a) the invention relates (i) directly to the business of
the Company or (ii) to the Company’s actual or demonstrably anticipated research or
development or (b) the invention results from any work performed by the employee for the
Company.
	 
	2.6	 	I attach hereto as Exhibit A a complete list of all inventions or other Intellectual
Property, if any, made by me prior to my employment with the Company that are relevant to any
aspect of the Company’s current and planned business, and I represent and warrant that such
list is complete. If no such list is attached to this Agreement, I represent that I have no
such inventions or other Intellectual Property at the time of signing this Agreement. If in
the course of my employment with the Company, I use or incorporate into a product or process
offered or under development by the Company an invention or other Intellectual Property not
included in the Company Intellectual Property in which I have an interest, the Company is
hereby granted a nonexclusive, fully paid-up, royalty-free, perpetual worldwide license of my
interest to use and sublicense such invention or other Intellectual Property without
restriction of any kind.
	 
	3.	 	Confidentiality Obligation.
	 
	3.1	 	Definition. As used in this Agreement, the term “Proprietary Information” means
information or material not generally known or available outside the Company, or information
or material entrusted to the Company by third parties, that I may obtain or create before or
during the term of my employment, or obtain through the Company’s resources or personnel after
my employment. This includes, but is not limited to, Company Intellectual Property, other
inventions, confidential knowledge, copyrights, product ideas, techniques, processes,
formulas, object codes, biological materials, mask works and/or any other information of any
type relating to documentation, laboratory notebooks, data, schematics, algorithms, flow
charts, mechanisms, research, manufacture, improvements, assembly, installation, marketing,
forecasts, sales, pricing, customers, customer lists, customer data, investor names and lists,
the duties, qualifications, performance levels and compensation of other employees, and/or
cost or other financial data concerning any of the foregoing or the Company and its
operations. Proprietary Information may be contained in material such as drawings, samples,
procedures, specifications, reports, studies, customer or supplier lists, budgets, cost or
price lists, compilations or computer programs, or may be in the nature of unwritten knowledge
or know-how.
	 
	3.2	 	Duty to Protect Proprietary Information. I understand and agree that all Proprietary
Information is the sole property of the Company and its assigns. I hereby assign to the
Company any rights I may acquire in such Proprietary Information. During and after my
employment, I will hold in confidence and not directly or indirectly disclose or use any
Proprietary Information, except as authorized by the Company as necessary for carrying out my
duties for the Company. I agree not to make copies of such Proprietary Information except as
authorized by the Company. Upon termination of my employment, or upon earlier request of the
Company, I will return or deliver to

-2-

 

	 	 	the Company all tangible or electronic forms or copies of such Proprietary Information in my
possession or control. These obligations with respect to Proprietary Information shall not
apply to information that I can conclusively establish with written documentation: (i) was
widely known to the public at the time I obtained the Proprietary Information or later
becomes widely known to the public through no direct or indirect action on my part; (ii) was
known to me prior to my employment or pre-employment relationship or association with
Company; or (iii) that I later receive from a third party having the lawful right to
disclose the same.
	 
	4.	 	Ownership of Physical Property. All documents, apparatus, equipment and other physical
property in any form, whether or not pertaining to Proprietary Information, furnished to me by
the Company or produced by me or others in connection with my employment shall be and remain
the sole property of the Company, and will be returned to the Company upon request or upon
termination of my employment, even if not requested.
	 
	5.	 	Non-solicitation of Employees, Consultants and Other Parties. During the term of my
employment with the Company, and for a period of one (1) year following the termination of my
employment with the Company for any reason, I shall not directly or indirectly solicit,
induce, recruit or encourage any of the Company’s employees or consultants to terminate their
relationship with the Company, or attempt any of the foregoing, either for myself or any other
person or entity. For a period of one (1) year following termination of my employment with
the Company for any reason, I shall not solicit any licensor, customer, or licensee of the
Company, that are known to me, with respect to any business, products or services that are
competitive to the products or services offered by the Company or under development as of the
date of termination of my relationship with the Company.
	 
	6.	 	Noncompetition. During the term of my employment with the Company and for one (1) year
following the termination of my employment or relationship with the Company for any reason, I
will not, without the Company’s prior written consent, directly or indirectly work on any
products or services that are competitive with products or services (a) being commercially
developed or exploited by the Company during my employment or (b) on which I worked or about
which I learned Proprietary Information during my employment with the Company.
	 
	7.	 	No Conflicts. I represent that my performance of all the terms of this Agreement as an
employee of the Company does not and will not breach any agreement to keep in confidence
proprietary information, knowledge or data acquired by me in confidence or in trust prior to
my becoming an employee of the Company, and I will not disclose to the Company, or induce the
Company to use, any confidential or proprietary information or material belonging to any
previous employer or others. I am not a party to and agree not to enter into any written or
oral agreement that conflicts or interferes with the provisions of this Agreement. I will not
bring to my employment with the Company any materials or documents obtained from or belonging
to a former employer except those documents listed in Exhibit A, which I have the
unrestricted right to use and disclose without breach of any agreement or other obligation.
	 
	8.	 	At-Will Relationship. I understand and acknowledge that my employment with the Company is
and shall continue to be at-will, as defined under applicable law, meaning that either I or
the Company may terminate the relationship at any time for any reason or no reason, without
further obligation or liability on the part of the Company.
	 
	9.	 	Miscellaneous. This Agreement inures to the benefit of successors and assigns of the Company
and is binding upon my heirs and legal representatives. My obligations under Sections 2 and 3
of this Agreement shall endure and subsist beyond the term of my employment, and my
obligations under

-3-

 

	 	 	Sections 5 and 6 of this Agreement shall continue beyond the term of this Agreement for the
periods noted in those sections.

I acknowledge that violation of this Agreement by me may cause irreparable injury to the
Company, and I agree that the Company will be entitled to seek extraordinary relief in
court, including, but not limited to, temporary restraining orders, preliminary injunctions
and permanent injunctions without the necessity of posting a bond or other security and
without prejudice to any other rights and remedies that the Company may have for a breach of
this Agreement.
	 
	 	 	This Agreement supersedes any oral, written or other communications or agreements concerning
the subject matter of this Agreement, and may be amended or waived only by a written
instrument that I and a duly authorized officer of the Company have signed. This Agreement
shall be governed by the laws of the State of Washington applicable to contracts entered
into and performed entirely within the State of Washington, without giving effect to
principles of conflict of laws. If any provision of this Agreement is held to be
unenforceable under applicable law, then such provision shall be excluded from this
Agreement only to the extent unenforceable, and the remainder of such provision and of this
Agreement shall be enforceable in accordance with its terms.
	 
	10.	 	Acknowledgment. I certify and acknowledge that I have carefully read all of the provisions
of this Agreement and that I understand and will fully and faithfully comply with such
provisions. I acknowledge that the Company’s counsel represents the interest of the Company,
and have received a recommendation to obtain independent legal counsel to review this
Agreement in advance and counsel me of my rights and obligations thereunder.

	 	 	 	 	 
	OMEROS MEDICAL SYSTEMS, INC.	 	Gregory A. Demopulos, M.D.
	 
	 	 	 	 
	By:

	 	/s/ Marcia S. Kelbon
	 	/s/ Gregory A. Demopulos, M.D.
	 

	 	 
	 	 
	 
	 	 	 	 
	Title:

	 	VP, Patent & General Counsel
	 	Dated: 12/11/01
	 

	 	 
	 	 
	 
	 	 	 	 
	Dated:

	 	12/11/01
	 	 
	 

	 	 	 	 

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Exhibit A

Omeros Medical Systems, Inc.

	1.	 	The following is a complete list of all inventions or other Intellectual Property relevant to
the subject matter of my employment by the Company that have been made or conceived or first
reduced to practice by me, alone or jointly with others or which were known to me prior to my
employment by the Company. I represent that such list is complete.

     Those inventions and intellectual property listed and described in Technology Transfer
Agreements executed by me and effective June 16, 1994 and December 11, 2001.

	2.	 	þ I am not bringing any materials and documents of a former employer to the Company.

         o I propose to bring to the Company the following non-proprietary materials or documents of a
former employer. I certify that I have the unrestricted right to use and disclose these without
breach of any confidence, agreement or other obligation.

	 	 	 	 	 
	 	 	 
	 	By:  	
/s/ Gregory A. Demopulos, M.D.
 	 
	 	 	Gregory A. Demopulos, M.D. 	 
	 	 	[Please Print Employee Name]exv10w11

 

Exhibit 10.11

OMEROS MEDICAL SYSTEMS, INC.

NOTICE OF STOCK OPTION GRANT

Gregory Demopulos, M.D.

6530 83rd Place SE

Mercer Island, Washington 98040

      You have been granted an option to purchase Common Stock of Omeros Medical Systems, Inc. (the
“Company”) as follows:

	 	 	 	 
	 
	Board Approval Date:	 	December 11, 2001                                                                       
	 
	 	 	 
	 
	Date of Grant (Later of Board	 	 
	 
	Approval Date or Commencement	 	 
	 
	of Employment/Consulting):	 	December 11, 2001
	 
	 	 	 
	 
	Exercise Price per Share:	 	$0.265
	 
	 	 	 
	 
	Total Number of Shares Granted:	 	93,125
	 
	 	 	 
	 
	Total Exercise Price:	 	$24,678.13
	 
	 	 	 
	 
	Type of Option:	 	Nonstatutory Stock Option
	 
	 	 	 
	 
	Expiration Date:	 	December 10, 2011
	 
	 	 	 
	 
	Vesting Commencement Date:	 	December 11, 2001
	 
	 	 	 
	 
	Vesting/Exercise Schedule:	 	This Option may be exercised, in
whole or in part, at any time after the Date of Grant.  The Shares underlying this Option shall be fully vested on the Vesting Commencement Date.

 

 

	 	 	 	 
	 
	Termination Period:	 	This Option may be exercised for 90 days after termination of employment
	 
	 	 	or consulting relationship except as set out in Section 5 of the Stock Option Agreement
	 
	 	 	(but in no event later than the Expiration Date); provided, that if Optionee’s
	 
	 	 	employment relationship is terminated by the Company in a “Termination Without Cause”
	 
	 	 	or by Optionee in a “Constructive Termination” (as both of such terms are defined in
	 
	 	 	the Employment Agreement dated December 11, 2001 between Company and Optionee) this
	 
	 	 	Option may be exercised until the Expiration Date.  Optionee is responsible for keeping
	 
	 	 	track of the Expiration Date.  The Company will not provide further notice of such
	 
	 	 	period.
	 
	 	 	 
	 
	Transferability:	 	This Option may not be transferred.

     By your signature and the signature of the Company’s representative below, you and the Company
agree that this option is granted under and governed by the terms and conditions of the Stock
Option Agreement which is attached and made a part of this document.

     All capitalized terms in this Notice shall have the meaning ascribed to them in this Notice
or, if not otherwise defined herein, in the attached Stock Option Agreement.

     In addition, you agree and acknowledge that nothing in this Notice or the attached documents
confers upon you any right to continue your employment or consulting relationship with the Company
for any period of time, nor does it interfere in any way with your right or the Company’s right to
terminate that relationship at any time, for any reason, with or without cause.

	 	 	 	 	 	 	 
	 	 	OMEROS MEDICAL SYSTEMS, INC.	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	 	 	 	 	 
	Gregory Demopulos, M.D.

	 	Name:	 	 	 	 
	 

	 	 	 	 	 	 
	 

	 	Title:	 	 	 	 
	 

	 	 	 	 	 	 

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OMEROS MEDICAL SYSTEMS, INC.

STOCK OPTION AGREEMENT

     1. Grant of Option. Omeros Medical Systems, Inc., a Washington corporation (the
“Company”), hereby grants to Gregory Demopulos, M.D. (“Optionee”), an option (the
“Option”) to purchase the total number of shares of Common Stock (the “Shares”) set
forth in the Notice of Stock Option Grant (the “Notice”), at the exercise price per Share
set forth in the Notice (the “Exercise Price”) subject to the terms, definitions and
provisions of this Agreement. All capitalized terms in this Agreement shall have the meaning
ascribed to them in the attached Appendix.

     2. Designation of Option. This Option is intended to be a Nonstatutory Stock Option.

     3. Exercise of Option. This Option shall be exercisable during its term in accordance
with the Vesting/Exercise Schedule set out in the Notice and with the provisions of Section 10 of
this Agreement as follows:

          (a) Right to Exercise.

               (i) This Option may not be exercised for a fraction of a share.

               (ii) In the event of Optionee’s death, disability or other termination of employment, the
exercisability of the Option is governed by Sections 5 and 6 below, subject to the limitations
contained in this Section 3.

               (iii) In no event may this Option be exercised after the Expiration Date of the Option as set
forth in the Notice.

          (b) Method of Exercise.

               (i) This Option shall be exercisable by execution and delivery of the Exercise Notice and
Restricted Stock Purchase Agreement attached hereto as Exhibit A, or any other form of
written notice approved for such purpose by the Company which shall state Optionee’s election to
exercise the Option, the number of Shares in respect of which the Option is being exercised, and
such other representations and agreements as to the holder’s investment intent with respect to such
Shares as may be required by the Company pursuant to the provisions of this Agreement. Such
written notice shall be signed by Optionee and shall be delivered to the Company by such means as
are determined by the Company in its discretion to constitute adequate delivery. The written
notice shall be accompanied by payment of the Exercise Price. This Option shall be deemed to be
exercised upon receipt by the Company of such written notice accompanied by the Exercise Price.

               (ii) As a condition to the exercise of this Option and as further set forth in Section 10 of
this Agreement, Optionee agrees to make adequate provision for federal,

 

 

state or
other tax withholding obligations, if any, which arise upon the vesting or exercise of the
Option, or disposition of Shares, whether by withholding, direct payment to the Company, or
otherwise.

               (iii) The Company is not obligated, and will have no liability for failure, to issue or
deliver any Shares upon exercise of the Option unless such issuance or delivery would comply with
the Applicable Laws, with such compliance determined by the Company in consultation with its legal
counsel. This Option may not be exercised if the issuance of such Shares upon such exercise or the
method of payment of consideration for such shares would constitute a violation of any applicable
federal or state securities or other law or regulation, including any rule under Part 221 of
Title 12 of the Code of Federal Regulations as promulgated by the Federal Reserve Board. As a
condition to the exercise of this Option, the Company may require Optionee to make any
representation and warranty to the Company as may be required by the Applicable Laws. Assuming
such compliance, for income tax purposes the Shares shall be considered transferred to Optionee on
the date on which the Option is exercised with respect to such Shares.

     4. Method of Payment. Payment of the Exercise Price shall be by any of the following,
or a combination of the following, at the election of Optionee:

          (a) cash, check or promissory note bearing a commercial rate of interest at the date of
exercise (either in the form attached as Exhibit B to this agreement or any other form
approved by the Company);

          (b) prior to the date, if any, upon which the Common Stock becomes a Listed Security, by
surrender of other shares of Common Stock of the Company that have an aggregate Fair Market Value
on the date of surrender equal to the Exercise Price of the Shares as to which the Option is being
exercised. In the case of shares acquired directly or indirectly from the Company, such shares
must have been owned by Optionee for more than six (6) months on the date of surrender (or such
other period of time as is necessary to avoid the Company’s incurring adverse accounting charges);
or

          (c) following the date, if any, upon which the Common Stock is a Listed Security, delivery of
a properly executed exercise notice together with irrevocable instructions to a broker approved by
the Company to deliver promptly to the Company the amount of sale or loan proceeds required to pay
the exercise price.

     5. Termination of Relationship. Following the date of termination of Optionee’s
Continuous Service Status for any reason (the “Termination Date”), Optionee may exercise
the Option only as set forth in the Notice and this Section 5. To the extent that Optionee is not
entitled to exercise this Option as of the Termination Date, or if Optionee does not exercise this
Option within the Termination Period set forth in the Notice or the termination periods set forth
below, the Option shall terminate in its entirety. In no event may any Option be exercised after
the Expiration Date as set forth in the Notice.

          (a) Termination. In the event of termination of Optionee’s Continuous Service Status
other than as a result of Optionee’s disability or death, Optionee may, to the

-2-

 

extent
otherwise so entitled at the date of such termination, exercise this Option during the
Termination Period set forth in the Notice.

          (b) Other Terminations. In connection with any termination other than a termination
covered by Section 5(a), Optionee may exercise the Option only as described below:

               (i) Termination upon Disability of Optionee. In the event of termination of
Optionee’s Continuous Service Status as a result of Optionee’s disability, Optionee may, but only
within twelve (12) months from the Termination Date, exercise this Option to the extent Optionee
was entitled to exercise it as of such Termination Date.

               (ii) Death of Optionee. In the event of the death of Optionee, the Option may be
exercised at any time within six (6) months following the date of death by Optionee’s estate or by
a person who acquired the right to exercise the Option by bequest or inheritance, but only to the
extent Optionee was entitled to exercise the Option as of the Termination Date.

          (c) Buyout Provisions. The Company may at any time offer to buy out the Option for a
payment in cash or Shares based on such terms and conditions as the Company shall establish and
communicate to the Optionee at the time that such offer is made.

     6. Non-Transferability of Option. This Option may not be transferred in any manner
otherwise than by will or by the laws of descent or distribution and may be exercised during the
lifetime of Optionee only by him or her. The terms of this Option shall be binding upon the
executors, administrators, heirs, successors and assigns of Optionee.

     7. Tax Consequences. Below is a brief summary as of the date of this Option of
certain of the federal tax consequences of exercise of this Option and disposition of the Shares
under the laws in effect as of the Date of Grant. THIS SUMMARY IS INCOMPLETE, AND THE TAX LAWS AND
REGULATIONS ARE SUBJECT TO CHANGE. OPTIONEE SHOULD CONSULT A TAX ADVISER BEFORE EXERCISING THIS
OPTION OR DISPOSING OF THE SHARES.

        Since this Option does not qualify as an incentive stock option under the Code, there may be a
regular federal (and state) income tax liability upon the exercise of the Option. Optionee will be
treated as having received compensation income (taxable at ordinary income tax rates) equal to the
excess, if any, of the fair market value of the Shares on the date of exercise over the Exercise
Price. If Optionee is an Employee, the Company will be required to withhold from Optionee’s
compensation or collect from Optionee and pay to the applicable taxing authorities an amount equal
to a percentage of this compensation income at the time of exercise. If Shares issued upon
exercise of a Nonstatutory Stock Option are held for at least one year, any gain realized on
disposition of the Shares will be treated as long-term capital gain for federal income tax
purposes.

     8. Lock-Up Agreement. In connection with the initial public offering of the Company’s
securities and upon request of the Company or the underwriters managing any
underwritten offering of the Company’s securities, Optionee hereby agrees not to sell, make
any

-3-

 

short sale of, loan, grant any option for the purchase of, or otherwise dispose of any
securities of the Company however and whenever acquired (other than those included in the
registration) without the prior written consent of the Company or such underwriters, as the case
may be, for such period of time (not to exceed 180 days) from the effective date of such
registration as may be requested by the Company or such managing underwriters and to execute an
agreement reflecting the foregoing as may be requested by the underwriters at the time of the
public offering.

     9. Effect of Agreement. Optionee represents that he or she is familiar with the terms
and provisions of this Agreement (and has had an opportunity to consult counsel regarding the
Option terms), and hereby accepts this Option and agrees to be bound by its contractual terms as
set forth herein. Optionee hereby agrees to accept as binding, conclusive and final all decisions
and interpretations of the Company regarding any questions relating to the Option.

     10. Taxes.

          (a) As a condition of the exercise of this Option, the Optionee (or in the case of the
Optionee’s death, the person exercising the Option) shall make such arrangements as the Company may
require for the satisfaction of any applicable federal, state, local or foreign withholding tax
obligations that may arise in connection with the exercise of the Option and the issuance of
Shares. The Company shall not be required to issue any Shares under this Agreement until such
obligations are satisfied. If the Company allows the withholding or surrender of Shares to satisfy
an Optionee’s tax withholding obligations under this Section 10 (whether pursuant to Section 10(c),
(d) or (e), or otherwise), the Company shall not allow Shares to be withheld in an amount that
exceeds the minimum statutory withholding rates for federal and state tax purposes, including
payroll taxes.

          (b) In the case of an Employee and in the absence of any other arrangement, the Employee shall
be deemed to have directed the Company to withhold or collect from his or her compensation an
amount sufficient to satisfy such tax obligations from the next payroll payment otherwise payable
after the date of an exercise of the Option.

          (c) This Section 10(c) shall apply only after the date, if any, upon which the Common Stock
becomes a Listed Security. In the case of an Optionee other than an Employee (or in the case of an
Employee where the next payroll payment is not sufficient to satisfy such tax obligations, with
respect to any remaining tax obligations), in the absence of any other arrangement and to the
extent permitted under the Applicable Laws, the Optionee shall be deemed to have elected to have
the Company withhold from the Shares to be issued upon exercise of the Option that number of Shares
having a Fair Market Value determined as of the applicable Tax Date (as defined below) equal to the
amount required to be withheld. For purposes of this Section 10, the Fair Market Value of the
Shares to be withheld shall be determined on the date that the amount of tax to be withheld is to
be determined under the Applicable Laws (the “Tax Date”).

          (d) If permitted in writing by the Company, in its sole discretion, Optionee may satisfy his
or her tax withholding obligations upon exercise of an Option by surrendering to the
Company Shares that have a Fair Market Value determined as of the applicable Tax Date

-4-

 

equal to
the amount required to be withheld. In the case of shares previously acquired from the Company
that are surrendered under this Section 10(d), such Shares must have been owned by the Optionee for
more than six (6) months on the date of surrender (or such other period of time as is required for
the Company to avoid adverse accounting charges).

          (e) Any election or deemed election by an Optionee to have Shares withheld to satisfy tax
withholding obligations under Section 10(c) or (d) above shall be irrevocable as to the particular
Shares as to which the election is made and shall be subject to the consent or disapproval of the
Company. Any election by an Optionee under Section 10(d) above must be made on or prior to the
applicable Tax Date.

          (f) In the event an election to have Shares withheld is made by an Optionee and the Tax Date
is deferred under Section 83 of the Code because no election is filed under Section 83(b) of the
Code, the Optionee shall receive the full number of Shares with respect to which the Option is
exercised but such Optionee shall be unconditionally obligated to tender back to the Company the
proper number of Shares on the Tax Date.

     11. Adjustments Upon Changes in Capitalization, Merger or Certain Other Transactions.

          (a) Changes in Capitalization. Subject to any required action by the shareholders of
the Company, the number of Shares of Common Stock covered by the Option, as well as the price per
Share of Common Stock covered by the Option, shall be proportionately adjusted for any increase or
decrease in the number of issued Shares of Common Stock resulting from a stock split, reverse stock
split, stock dividend, combination, recapitalization or reclassification of the Common Stock, or
any other increase or decrease in the number of issued Shares of Common Stock effected without
receipt of consideration by the Company; provided, however, that conversion of any convertible
securities of the Company shall not be deemed to have been “effected without receipt of
consideration.” Such adjustment shall be made by the Company, and its determination in that
respect shall be final, binding and conclusive. Except as expressly provided herein, no issuance
by the Company of shares of stock of any class, or securities convertible into shares of stock of
any class, shall affect, and no adjustment by reason thereof shall be made with respect to, the
number or price of Shares of Common Stock subject to an Option.

          (b) Dissolution or Liquidation. In the event of the dissolution or liquidation of the
Company, the Option will terminate immediately prior to the consummation of such action, unless
otherwise determined by the Company, in it sole discretion.

          (c) Corporate Transaction. In the event of a Corporate Transaction, each outstanding
Option shall be assumed or an equivalent option or right shall be substituted by such successor
corporation or a parent or subsidiary of such successor corporation (the “Successor
Corporation”), unless the Successor Corporation does not agree to assume the award or to
substitute an equivalent option or right, in which case such Option shall terminate upon the
consummation of the transaction.

-5-

 

          For purposes of this Section 11(c), an Option shall be considered assumed, without limitation,
if, at the time of issuance of the stock or other consideration upon a Corporate Transaction each
holder of an Option would be entitled to receive upon exercise of the award the same number and
kind of shares of stock or the same amount of property, cash or securities as such holder would
have been entitled to receive upon the occurrence of the transaction if the holder had been,
immediately prior to such transaction, the holder of the number of Shares of Common Stock covered
by the award at such time (after giving effect to any adjustments in the number of Shares covered
by the Option as provided for in this Section 11); provided that if such consideration received in
the transaction is not solely common stock of the Successor Corporation, the Company may, with the
consent of the Successor Corporation, provide for the consideration to be received upon exercise of
the award to be solely common stock of the Successor Corporation equal to the Fair Market Value of
the per Share consideration received by holders of Common Stock in the transaction.

          (d) Certain Distributions. In the event of any distribution to the Company’s
shareholders of securities of any other entity or other assets (other than dividends payable in
cash or stock of the Company) without receipt of consideration by the Company, the Company may, in
its sole discretion, appropriately adjust the price per Share of Common Stock covered by each
outstanding Option to reflect the effect of such distribution.

     12. Amendment of Option. In addition to any changes or adjustments that may be made
pursuant to Section 11 above, the Company’s Board of Directors shall have the authority to make the
following determinations with respect to, and amendments to, the Option without the consent of
Optionee: (a) waiver of any restriction applicable to the Option or the Optioned Stock; (b)
settlement in cash of the Option; (c) reduction in the exercise price of the Option to the Fair
Market Value of the Company’s Common Stock as of the date of such reduction in price; and (d) any
other amendment or adjustment that does not materially and adversely affect Optionee’s rights
hereunder.

     13. Miscellaneous.

          (a) Governing Law. This Agreement and all acts and transactions pursuant hereto and
the rights and obligations of the parties hereto shall be governed, construed and interpreted in
accordance with the laws of the State of Washington, without giving effect to principles of
conflicts of law.

          (b) Entire Agreement; Enforcement of Rights. This Agreement sets forth the entire
agreement and understanding of the parties relating to the subject matter herein and merges all
prior discussions between them. No modification of or amendment to this Agreement, nor any waiver
of any rights under this Agreement, shall be effective unless in writing signed by the parties to
this Agreement. The failure by either party to enforce any rights under this Agreement shall not
be construed as a waiver of any rights of such party.

          (c) Severability. If one or more provisions of this Agreement are held to be
unenforceable under applicable law, the parties agree to renegotiate such provision in good
faith. In the event that the parties cannot reach a mutually agreeable and enforceable replacement
for
such provision, then (i) such provision shall be excluded from this Agreement, (ii) the
balance of

-6-

 

the Agreement shall be interpreted as if such provision were so excluded and (iii) the
balance of the Agreement shall be enforceable in accordance with its terms.

          (d) Construction. This Agreement is the result of negotiations between and has been
reviewed by each of the parties hereto and their respective counsel, if any; accordingly, this
Agreement shall be deemed to be the product of all of the parties hereto, and no ambiguity shall be
construed in favor of or against any one of the parties hereto.

          (e) Notices. Any notice required or permitted by this Agreement shall be in writing
and shall be deemed sufficient when delivered personally or sent by telegram or fax or forty-eight
(48) hours after being deposited in the U.S. mail, as certified or registered mail, with postage
prepaid, and addressed to the party to be notified at such party’s address as set forth below or as
subsequently modified by written notice.

          (f) Counterparts. This Agreement may be executed in two or more counterparts, each of
which shall be deemed an original and all of which together shall constitute one instrument.

          (g) Successors and Assigns. The rights and benefits of this Agreement shall inure to
the benefit of, and be enforceable by the Company’s successors and assigns. The rights and
obligations of Optionee under this Agreement may only be assigned with the prior written consent of
the Company.

          (h) Accredited Investor. The Optionee is an accredited investor as defined in Rule
501(a) of Regulation D promulgated under the Securities Act of 1933.

[Signature Page Follows]

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     This Agreement may be executed in two or more counterparts, each of which shall be deemed an
original and all of which together shall constitute one document.

	 	 	 	 	 	 	 	 	 	 	 
	Gregory Demopulos, M.D.	 	OMEROS MEDICAL SYSTEMS, INC.
	 
	 	 	 	 	 	 	 	 	 	 
	 

	 	 	 	By:	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 
	 

	 	 	 	Name:	 	 	 	 	 	 
	 

	 	 	 	 	 	 

	 	 	 	 
	Dated:

	 	 	 	Title:	 	 	 	 	 	 
	 

	 	 

	 	 	 	 

	 	 	 	 

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APPENDIX

          (a) “Affiliate” means an entity other than a Subsidiary (as defined below) which,
together with the Company, is under common control of a third person or entity.

          (b) “Applicable Laws” means the legal requirements relating to the administration of
stock option and grants under applicable U.S. state corporate laws, U.S. federal and applicable
state securities laws, the Code, any Stock Exchange rules or regulations and the applicable laws of
any other country or jurisdiction where the Option is granted under this Agreement, as such laws,
rules, regulations and requirements shall be in place from time to time.

          (c) “Board” means the Board of Directors of the Company.

          (d) “Code” means the Internal Revenue Code of 1986, as amended.

          (e) “Common Stock” means the Common Stock of the Company.

          (f) “Consultant” means any person, including an advisor, who is engaged by the Company
or any Parent, Subsidiary or Affiliate to render services and is compensated for such services, and
any director of the Company whether compensated for such services or not.

          (g) “Continuous Service Status” means the absence of any interruption or termination
of service as an Employee or Consultant. Continuous Service Status as an Employee or Consultant
shall not be considered interrupted in the case of: (i) sick leave; (ii) military leave; (iii) any
other leave of absence approved by the Administrator, provided that such leave is for a period of
not more than ninety (90) days, unless reemployment upon the expiration of such leave is guaranteed
by contract or statute, or unless provided otherwise pursuant to Company policy adopted from time
to time; or (iv) in the case of transfers between locations of the Company or between the Company,
its Parents, Subsidiaries, Affiliates or their respective successors. A change in status from an
Employee to a Consultant or from a Consultant to an Employee will not constitute an interruption of
Continuous Service Status.

          (h) “Corporate Transaction” means a sale of all or substantially all of the Company’s
assets, or a merger, consolidation or other capital reorganization of the Company with or into
another corporation.

          (i) “Director” means a member of the Board.

          (j) “Employee” means any person employed by the Company or any Parent, Subsidiary or
Affiliate, with the status of employment determined based upon such factors as are deemed
appropriate by the Administrator in its discretion, subject to any requirements of the Code or the
Applicable Laws. The payment by the Company of a director’s fee to a Director shall not be
sufficient to constitute “employment” of such Director by the Company.

          (k) “Exchange Act” means the Securities Exchange Act of 1934, as amended.

 

 

          (l) “Fair Market Value” means, as of any date, the fair market value of the Common
Stock, as determined by the Administrator in good faith on such basis as it deems appropriate.
Whenever possible, the determination of Fair Market Value shall be based upon the closing price for
the Shares as reported in the Wall Street Journal for the applicable date.

          (m) “Listed Security” means any security of the Company that is listed or approved for
listing on a national securities exchange or designated or approved for designation as a national
market system security on an interdealer quotation system by the National Association of Securities
Dealers, Inc.

          (n) “Nonstatutory Stock Option” means an Option not intended to qualify as an
incentive stock option within the meaning of Section 422 of the Code.

          (o) “Option” means a stock option granted pursuant to this Agreement.

          (p) “Optioned Stock” means the Common Stock subject to an Option.

          (q) “Parent” means a “parent corporation,” whether now or hereafter existing, as
defined in Section 424(e) of the Code, or any successor provision.

          (r) “Share” means a share of the Common Stock, as adjusted in accordance with Section
11 of this Agreement.

          (s) “Stock Exchange” means any stock exchange or consolidated stock price reporting
system on which prices for the Common Stock are quoted at any given time.

          (t) “Subsidiary” means a “subsidiary corporation,” whether now or hereafter existing,
as defined in Section 424(f) of the Code, or any successor provision.

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EXHIBIT A

OMEROS MEDICAL SYSTEMS, INC.

EXERCISE NOTICE AND RESTRICTED STOCK PURCHASE AGREEMENT

     This Agreement (“Agreement”) is made as of ___, by and between Omeros
Medical Systems, Inc., a Washington corporation (the “Company”), and Gregory Demopulos,
M.D. (“Purchaser”). To the extent any capitalized terms used in this Agreement are not
defined, they shall have the meaning ascribed to them in the Option Agreement (as defined below).

     1. Exercise of Option. Subject to the terms and conditions hereof, Purchaser hereby
elects to exercise his or her option to purchase ___ shares of the Common Stock (the
“Shares”) of the Company under and pursuant to the Stock Option Agreement dated December
11, 2001 (the “Option Agreement”). The purchase price for the Shares shall be $0.265 per
Share for a total purchase price of $___. The term “Shares” refers to the purchased
Shares and all securities received in replacement of the Shares or as stock dividends or splits,
all securities received in replacement of the Shares in a recapitalization, merger, reorganization,
exchange or the like, and all new, substituted or additional securities or other properties to
which Purchaser is entitled by reason of Purchaser’s ownership of the Shares.

     2. Time and Place of Exercise. The purchase and sale of the Shares under this
Agreement shall occur at the principal office of the Company simultaneously with the execution and
delivery of this Agreement in accordance with the provisions of Section 3(b) of the Option
Agreement. On such date, the Company will deliver to Purchaser a certificate representing the
Shares to be purchased by Purchaser (which shall be issued in Purchaser’s name) against payment of
the exercise price therefor by Purchaser by (a) check made payable to the Company, (b) cancellation
of indebtedness of the Company to Purchaser, (c) delivery of shares of the Common Stock of the
Company in accordance with Section 4(b) of the Option Agreement, or (d) delivery of a promissory
note in the form attached as Exhibit B to the Option Agreement (or in any form acceptable
to the Company), or (e) a combination of the foregoing. If Purchaser delivers a promissory note as
partial or full payment of the purchase price, Purchaser will also deliver a Pledge and Security
Agreement in the form attached as Exhibit C to the Option Agreement (or in any form
acceptable to the Company).

     3. Limitations on Transfer. In addition to any other limitation on transfer created
by applicable securities laws, Purchaser shall not assign, encumber or dispose of any interest in
the Shares except in compliance with the provisions below and applicable securities laws.

          (a) Right of First Refusal. Before any Shares held by Purchaser or any transferee of
Purchaser (either being sometimes referred to herein as the “Holder”) may be sold or
otherwise transferred (including transfer by gift or operation of law), the Company or its
assignee(s) shall have a right of first refusal to purchase the Shares on the terms and conditions
set forth in this Section 3(a) (the “Right of First Refusal”).

 

 

               (i) Notice of Proposed Transfer. The Holder of the Shares shall deliver to the
Company a written notice (the “Notice”) stating: (i) the Holder’s bona fide intention to
sell or otherwise transfer such Shares; (ii) the name of each proposed purchaser or other
transferee (“Proposed Transferee”); (iii) the number of Shares to be transferred to each
Proposed Transferee; and (iv) the terms and conditions of each proposed sale or transfer. The
Holder shall offer the Shares at the same price (the “Offered Price”) and upon the same
terms (or terms as similar as reasonably possible) to the Company or its assignee(s).

               (ii) Exercise of Right of First Refusal. At any time within thirty (30) days after
receipt of the Notice, the Company and/or its assignee(s) may, by giving written notice to the
Holder, elect to purchase all, but not less than all, of the Shares proposed to be transferred to
any one or more of the Proposed Transferees, at the purchase price determined in accordance with
subsection (iii) below.

               (iii) Purchase Price. The purchase price (“Purchase Price”) for the Shares
purchased by the Company or its assignee(s) under this Section 3(a) shall be the Offered Price. If
the Offered Price includes consideration other than cash, the cash equivalent value of the non-cash
consideration shall be determined by the Board of Directors of the Company in good faith.

               (iv) Payment. Payment of the Purchase Price shall be made, at the option of the
Company or its assignee(s), in cash (by check), by cancellation of all or a portion of any
outstanding indebtedness, or by any combination thereof within 30 days after receipt of the Notice
or in the manner and at the times set forth in the Notice.

               (v) Holder’s Right to Transfer. If all of the Shares proposed in the Notice to be
transferred to a given Proposed Transferee are not purchased by the Company and/or its assignee(s)
as provided in this Section 3(a), then the Holder may sell or otherwise transfer such Shares to
that Proposed Transferee at the Offered Price or at a higher price, provided that such sale or
other transfer is consummated within 60 days after the date of the Notice and provided further that
any such sale or other transfer is effected in accordance with any applicable securities laws and
the Proposed Transferee agrees in writing that the provisions of this Section 3 shall continue to
apply to the Shares in the hands of such Proposed Transferee. If the Shares described in the
Notice are not transferred to the Proposed Transferee within such period, or if the Holder proposes
to change the price or other terms to make them more favorable to the Proposed Transferee, a new
Notice shall be given to the Company, and the Company and/or its assignees shall again be offered
the Right of First Refusal before any Shares held by the Holder may be sold or otherwise
transferred.

               (vi) Exception for Certain Family Transfers. Anything to the contrary contained in
this Section 3(a) notwithstanding, the transfer of any or all of the Shares during Purchaser’s
lifetime or on Purchaser’s death by will or intestacy to Purchaser’s Immediate Family or a trust
for the benefit of Purchaser’s Immediate Family shall be exempt from the provisions of this Section
3(a). “Immediate Family” as used herein shall mean spouse, lineal descendant or
antecedent, father, mother, brother or sister. In such case, the transferee or other recipient
shall receive and hold the Shares so transferred subject to the provisions of this

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Section, and there shall be no further transfer of such Shares except in accordance with the terms of
this Section 3.

          (b) Involuntary Transfer.

               (i) Company’s Right to Purchase upon Involuntary Transfer. In the event, at any time
after the date of this Agreement, of any transfer by operation of law or other involuntary transfer
(including death or divorce, but excluding a transfer to Immediate Family as set forth in Section
3(a)(vi) above) of all or a portion of the Shares by the record holder thereof, the Company shall
have an option to purchase all of the Shares transferred at the greater of the purchase price paid
by Purchaser pursuant to this Agreement or the fair market value of the Shares on the date of
transfer. Upon such a transfer, the person acquiring the Shares shall promptly notify the
Secretary of the Company of such transfer. The right to purchase such Shares shall be provided to
the Company for a period of thirty (30) days following receipt by the Company of written notice by
the person acquiring the Shares.

               (ii) Price for Involuntary Transfer. With respect to any stock to be transferred
pursuant to Section 3(b)(i), the price per Share shall be a price set by the Board of Directors of
the Company that will reflect the current value of the stock in terms of present earnings and
future prospects of the Company. The Company shall notify Purchaser or his or her executor of the
price so determined within thirty (30) days after receipt by it of written notice of the transfer
or proposed transfer of Shares. However, if the Purchaser does not agree with the valuation as
determined by the Board of Directors of the Company, the Purchaser shall be entitled to have the
valuation determined by an independent appraiser to be mutually agreed upon by the Company and the
Purchaser and whose fees shall be borne equally by the Company and the Purchaser.

          (c) Assignment. The right of the Company to purchase any part of the Shares may be
assigned in whole or in part to any shareholder or shareholders of the Company or other persons or
organizations.

          (d) Restrictions Binding on Transferees. All transferees of Shares or any interest
therein will receive and hold such Shares or interest subject to the provisions of this Agreement.
Any sale or transfer of the Company’s Shares shall be void unless the provisions of this Agreement
are satisfied.

          (e) Termination of Rights. The right of first refusal granted the Company by
Section 3(a) above and the option to repurchase the Shares in the event of an involuntary transfer
granted the Company by Section 3(b) above shall terminate upon the first sale of Common Stock of
the Company to the general public pursuant to a registration statement filed with and declared
effective by the Securities and Exchange Commission under the Securities Act of 1933, as amended
(the “Securities Act”). Upon termination of the right of first refusal described in
Section 3(b) above, a new certificate or certificates representing the Shares not repurchased shall
be issued, on written request, without the legend referred to in Section 6(a)(ii) herein and
delivered to Purchaser.

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     4. Investment and Taxation Representations. In connection with the purchase of the
Shares, Purchaser represents to the Company the following:

          (a) Purchaser is aware of the Company’s business affairs and financial condition and has
acquired sufficient information about the Company to reach an informed and knowledgeable decision
to acquire the Shares. Purchaser is purchasing these securities for investment for his or her own
account only and not with a view to, or for resale in connection with, any “distribution” thereof
within the meaning of the Securities Act or under any applicable provision of state law. Purchaser
does not have any present intention to transfer the Shares to any person or entity.

          (b) Purchaser understands that the Shares have not been registered under the Securities Act by
reason of a specific exemption therefrom, which exemption depends upon, among other things, the
bona fide nature of Purchaser’s investment intent as expressed herein.

          (c) Purchaser further acknowledges and understands that the securities must be held
indefinitely unless they are subsequently registered under the Securities Act or an exemption from
such registration is available. Purchaser further acknowledges and understands that the Company is
under no obligation to register the securities. Purchaser understands that the certificate(s)
evidencing the securities will be imprinted with a legend which prohibits the transfer of the
securities unless they are registered or such registration is not required in the opinion of
counsel for the Company.

          (d) Purchaser is familiar with the provisions of Rules 144 and 701, each promulgated under the
Securities Act, which, in substance, permit limited public resale of “restricted securities”
acquired, directly or indirectly, from the issuer of the securities (or from an affiliate of such
issuer), in a non-public offering subject to the satisfaction of certain conditions. Purchaser
understands that the Company provides no assurances as to whether he or she will be able to resell
any or all of the Shares pursuant to Rule 144 or Rule 701, which rules require, among other things,
that the Company be subject to the reporting requirements of the Securities Exchange Act of 1934,
as amended, that resales of securities take place only after the holder of the Shares has held the
Shares for certain specified time periods, and under certain circumstances, that resales of
securities be limited in volume and take place only pursuant to brokered transactions.
Notwithstanding this paragraph (d), Purchaser acknowledges and agrees to the restrictions set forth
in paragraph (e) below.

          (e) Purchaser further understands that in the event all of the applicable requirements of
Rule 144 or 701 are not satisfied, registration under the Securities Act, compliance with
Regulation A, or some other registration exemption will be required; and that, notwithstanding the
fact that Rules 144 and 701 are not exclusive, the Staff of the Securities and Exchange Commission
has expressed its opinion that persons proposing to sell private placement securities other than in
a registered offering and otherwise than pursuant to Rule 144 or 701 will have a substantial burden
of proof in establishing that an exemption from registration is available for such offers or sales,
and that such persons and their respective brokers who participate in such transactions do so at
their own risk.

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         (f) Purchaser understands that Purchaser may suffer adverse tax consequences as a result of
Purchaser’s purchase or disposition of the Shares. Purchaser represents that Purchaser has
consulted any tax consultants Purchaser deems advisable in connection with the purchase or
disposition of the Shares and that Purchaser is not relying on the Company for any tax advice.

         (g) Purchaser is an accredited investor as defined in Rule 501(a) of Regulation D promulgated
under the Securities Act of 1933.

     5. Restrictive Legends and Stop-Transfer Orders.

         (a) Legends. The certificate or certificates representing the Shares shall bear the
following legends (as well as any legends required by applicable state and federal corporate and
securities laws):

	 	(i)	 	THE SHARES REPRESENTED BY THIS
CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT
OF 1933, AND HAVE BEEN ACQUIRED FOR INVESTMENT AND NOT WITH A
VIEW TO, OR IN CONNECTION WITH, THE SALE OR DISTRIBUTION
THEREOF. NO SUCH SALE OR DISTRIBUTION MAY BE EFFECTED WITHOUT
AN EFFECTIVE REGISTRATION STATEMENT RELATED THERETO OR AN
OPINION OF COUNSEL FOR THE COMPANY THAT SUCH REGISTRATION IS
NOT REQUIRED UNDER THE SECURITIES ACT OF 1933.
	 
	 	(ii)	 	THE SHARES REPRESENTED BY THIS
CERTIFICATE MAY BE TRANSFERRED ONLY IN ACCORDANCE WITH THE
TERMS OF AN AGREEMENT BETWEEN THE COMPANY AND THE SHAREHOLDER,
A COPY OF WHICH IS ON FILE WITH THE SECRETARY OF THE COMPANY.

          (b) Stop-Transfer Notices. Purchaser agrees that, in order to ensure compliance with
the restrictions referred to herein, the Company may issue appropriate “stop transfer” instructions
to its transfer agent, if any, and that, if the Company transfers its own securities, it may make
appropriate notations to the same effect in its own records.

          (c) Refusal to Transfer. The Company shall not be required (i) to transfer on its
books any Shares that have been sold or otherwise transferred in violation of any of the provisions
of this Agreement or (ii) to treat as owner of such Shares or to accord the right to vote or pay
dividends to any purchaser or other transferee to whom such Shares shall have been so transferred.

     6. No Employment Rights. Nothing in this Agreement shall affect in any manner
whatsoever the right or power of the Company, or a parent or subsidiary of the Company, to

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terminate Purchaser’s employment or consulting relationship, for any reason, with or without cause.

     7. Lock-Up Agreement. In connection with the initial public offering of the Company’s
securities and upon request of the Company or the underwriters managing any underwritten offering
of the Company’s securities, Purchaser agrees not to sell, make any short sale of, loan, grant any
option for the purchase of, or otherwise dispose of any securities of the Company however or
whenever acquired (other than those included in the registration) without the prior written consent
of the Company or such underwriters, as the case may be, for such period of time (not to exceed 180
days) from the effective date of such registration as may be requested by the Company or such
managing underwriters and to execute an agreement reflecting the foregoing as may be requested by
the underwriters at the time of the public offering.

     8. Miscellaneous.

          (a) Governing Law. This Agreement and all acts and transactions pursuant hereto and
the rights and obligations of the parties hereto shall be governed, construed and interpreted in
accordance with the laws of the State of Washington, without giving effect to principles of
conflicts of law.

          (b) Entire Agreement; Enforcement of Rights. This Agreement sets forth the entire
agreement and understanding of the parties relating to the subject matter herein and merges all
prior discussions between them. No modification of or amendment to this Agreement, nor any waiver
of any rights under this Agreement, shall be effective unless in writing signed by the parties to
this Agreement. The failure by either party to enforce any rights under this Agreement shall not
be construed as a waiver of any rights of such party.

          (c) Severability. If one or more provisions of this Agreement are held to be
unenforceable under applicable law, the parties agree to renegotiate such provision in good
faith. In the event that the parties cannot reach a mutually agreeable and enforceable replacement
for such provision, then (i) such provision shall be excluded from this Agreement, (ii) the balance
of the Agreement shall be interpreted as if such provision were so excluded and (iii) the balance
of the Agreement shall be enforceable in accordance with its terms.

          (d) Construction. This Agreement is the result of negotiations between and has been
reviewed by each of the parties hereto and their respective counsel, if any; accordingly, this
Agreement shall be deemed to be the product of all of the parties hereto, and no ambiguity shall be
construed in favor of or against any one of the parties hereto.

          (e) Notices. Any notice required or permitted by this Agreement shall be in writing
and shall be deemed sufficient when delivered personally or sent by telegram or fax or forty-eight
(48) hours after being deposited in the U.S. mail, as certified or registered mail, with postage
prepaid, and addressed to the party to be notified at such party’s address as set forth below or as
subsequently modified by written notice.

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          (f) Counterparts. This Agreement may be executed in two or more counterparts, each of
which shall be deemed an original and all of which together shall constitute one instrument.

          (g) Successors and Assigns. The rights and benefits of this Agreement shall inure to
the benefit of, and be enforceable by the Company’s successors and assigns. The rights and
obligations of Purchaser under this Agreement may only be assigned with the prior written consent
of the Company.

[Signature Page Follows]

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     The parties have executed this Exercise Notice and Restricted Stock Purchase Agreement as of
the date first set forth above.

	 	 	 	 	 
	 	 	COMPANY:
	 
	 	 	 	 
	 	 	OMEROS MEDICAL SYSTEMS, INC.
	 
	 	 	 	 
	 

	 	By:	 	 
	 

	 	 	 	 
	 

	 	Name:	 	 
	 

	 	 	 	 
	 

	 	Title:	 	 
	 

	 	 	 	 
	 
	 	 	 	 
	 

	 	PURCHASER:
	 
	 	 	 	 
	 	 	Gregory Demopulos, M.D.
	 
	 	 	 	 
	 	 	 
	 

	 	(Signature)
	 
	 	 	 	 
	 

	 	Address:	 	 
	 

	 	 	 	 
	 
	 	 	 	 
	 

	 	 	 	 

I, ___, spouse of Gregory Demopulos, M.D., have read and hereby approve the
foregoing Agreement. In consideration of the Company’s granting my spouse the right to purchase
the Shares as set forth in the Agreement, I hereby agree to be irrevocably bound by the Agreement
and further agree that any community property or other such interest shall hereby be similarly
bound by the Agreement. I hereby appoint my spouse as my attorney-in-fact with respect to any
amendment or exercise of any rights under the Agreement.

			
	 
	 

	 	 
	 

	 	Spouse of Gregory Demopulos, M.D.

 

 

EXHIBIT B

PROMISSORY NOTE

			
	$___
	 	Seattle, Washington

___, 2003

     For value received, the undersigned promises to pay Omeros Medical Systems, Inc., a Washington
corporation (the “Company”), at its principal office the principal sum of $___with
interest from the date hereof at a rate of ___% [rate offered by third party commercial lender]
per annum, compounded semiannually, on the unpaid balance of such principal sum. Such principal
and interest shall be due and payable on the earlier to occur of Termination for Cause, Voluntary
Termination or five years after either Termination Without Cause or Constructive Termination, as
such terms are defined in the Employment Agreement dated December 11, 2001 by and between the
Company and the undersigned.

     Principal and interest are payable in lawful money of the United States of America. AMOUNTS
DUE UNDER THIS NOTE MAY BE PREPAID AT ANY TIME WITHOUT PENALTY.

     Should suit be commenced to collect any sums due under this Note, such sum as the Court may
deem reasonable shall be added hereto as attorneys’ fees. The makers and endorsers have severally
waived presentment for payment, protest notice of protest and notice of nonpayment of this Note.

     This Note, which shall be a recourse loan with respect to thirty percent (30%) of the
principal amount hereof and with respect to one hundred percent (100%) of the interest thereon, is
secured by a pledge of certain shares of Common Stock of the Company and is subject to the terms of
a Pledge and Security Agreement between the undersigned and the Company of even date herewith.

			
	 
	 

	 	 
	 

	 	Gregory Demopulos, M.D.

Agreed to and accepted:

	 	 	 	 	 
	OMEROS MEDICAL SYSTEMS, INC.	 	 
	 
	 	 	 	 
	 	 	 
	By:
	 	 	 	 
	 

	 	 	 	 
	Its:
	 	 	 	 
	 

	 	 	 	 

 

 

EXHIBIT C

PLEDGE AND SECURITY AGREEMENT

     This
Pledge and Security Agreement (the “Agreement”) is entered into this ___ day of
___ 2003 by and between Omeros Medical Systems, Inc., a Washington corporation (the
“Company”), and Gregory A. Demopulos, M.D. (“Purchaser”).

RECITALS

     In
connection with Purchaser’s exercise of an option to purchase ___ shares of the
Company’s Common Stock pursuant to a Stock Option Agreement dated December 11, 2001 between
Purchaser and the Company (the “Option Agreement”), Purchaser is delivering a promissory
note of even date herewith (the “Note”) in full or partial payment of the exercise price
for such shares. The Company requires that the Note be secured by a pledge of a number of shares
of Common Stock of the Company equal to the number of shares of Common Stock purchased pursuant to
the exercise of the Option Agreement on the terms set forth below.

AGREEMENT

     In consideration of the Company’s acceptance of the Note as full or partial payment of the
exercise price of the shares purchased pursuant to the exercise of the Option Agreement, and for
other good and valuable consideration, the receipt of which is hereby acknowledged, the parties
hereto agree as follows:

     1. The Note shall become payable as described therein.

     2. Purchaser shall deliver to the Secretary of the Company, or his or her designee
(hereinafter referred to as the “Pledge Holder”), stock certificate number ___
representing ___ shares of the Company’s Common Stock (the “Shares”), together with an
Assignment Separate from Certificate in the form attached to this Agreement as Attachment A
executed by Purchaser and by Purchaser’s spouse (if required for transfer), in blank, for use in
transferring all or a portion of the Shares to the Company if, as and when required pursuant to
this Agreement. In addition, if Purchaser is married, Purchaser’s spouse shall execute the
signature page attached to this Agreement.

     3. As security for the payment of the Note and any renewal, extension or modification of the
Note, Purchaser hereby grants to the Company a security interest in and pledges with and delivers
to the Company the Shares (sometimes referred to herein as the “Collateral”).

     4. In the event that Purchaser prepays all or a portion of the Note, in accordance with the
provisions thereof, Purchaser intends, unless written notice to the contrary is delivered to the
Pledge Holder, that the Shares represented by the portion of the Note so repaid, including annual
interest thereon, shall continue to be so held by the Pledge Holder, to serve as independent
collateral for the outstanding portion of the Note for the purpose of

 

 

commencing the holding period set forth in Rule 144(d) promulgated under the Securities Act of
1933, as amended (the “Securities Act”).

     5. In the event of any foreclosure of the security interest created by this Agreement, the
Company may sell the Shares at a private sale or may repurchase the Shares itself. The parties
agree that, prior to the establishment of a public market for the Shares of the Company, the
securities laws affecting sale of the Shares make a public sale of the Shares commercially
unreasonable. The parties further agree that the repurchasing of such Shares by the Company, or by
any person to whom the Company may have assigned its rights under this Agreement, is commercially
reasonable if made at a price determined by the Board of Directors in its discretion, fairly
exercised, representing what would be the fair market value of the Shares reduced by any limitation
on transferability, whether due to the size of the block of shares or the restrictions of
applicable securities laws.

     6. In the event of default in payment when due of any indebtedness under the Note, the Company
may elect then, or at any time thereafter, to exercise all rights available to a secured party
under the Washington Commercial Code including the right to sell the Collateral at a private or
public sale or repurchase the Shares as provided above. The proceeds of any sale shall be applied
in the following order:

          (a) To the extent necessary, proceeds shall be used to pay all reasonable expenses of the
Company in enforcing this Agreement and the Note, including, without limitation, reasonable
attorney’s fees and legal expenses incurred by the Company.

          (b) To the extent necessary, proceeds shall be used to satisfy any remaining indebtedness
under Purchaser’s Note.

          (c) Any remaining proceeds shall be delivered to Purchaser.

     7. Upon full payment by Purchaser of all amounts due under the Note, Pledge Holder shall
deliver to Purchaser all Shares in Pledge Holder’s possession belonging to Purchaser, and Pledge
Holder shall thereupon be discharged of all further obligations under this Agreement;
provided, however, that Pledge Holder shall nevertheless retain the Shares as
escrow agent if at the time of full payment by Purchaser said Shares are still subject to a
Repurchase Option in favor of the Company.

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     The parties have executed this Pledge and Security Agreement as of the date first set forth
above.

	 	 	 	 	 	 	 
	 	 	COMPANY:	 	 
	 
	 	 	OMEROS MEDICAL SYSTEMS, INC.	 	 
	 
	 

	 	By:	 	 	 	 
	 

	 	 	 	 

	 	 
	 

	 	Name:	 	 	 	 
	 

	 	 	 	 	 	 
	 

	 	 	 	(print)	 	 
	 

	 	Title:	 	 	 	 
	 

	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	 

	 	Address:	 	 	 	 
	 
	 	 	 	 	 	 
	 	 	 	 	 
	 
	 	 	 	 	 	 
	 	 	 	 	 
	 
	 	 	 	 	 	 
	 	 	PURCHASER:	 	 
	 
	 	 	 	 	 	 
	 	 	Gregory Demopulos, M.D.	 	 
	 
	 	 	 	 	 	 
	 	 	 	 	 
	 	 	(Signature)	 	 
	 
	 	 	 	 	 	 
	 	 	 	 	 
	 	 	(Print Name)	 	 
	 
	 	 	 	 	 	 
	 

	 	Address:	 	 	 	 
	 
	 	 	 	 	 	 
	 	 	 	 	 
	 
	 	 	 	 	 	 
	 	 	 	 	 

-3-

 

ATTACHMENT A

ASSIGNMENT SEPARATE FROM CERTIFICATE

     FOR VALUE RECEIVED and pursuant to that certain Pledge and Security Agreement between the
undersigned (“Purchaser”) and Omeros Medical Systems, Inc. (the “Company”) dated
___, ___ (the “Agreement”), Purchaser hereby sells, assigns and transfers unto
the Company ___(___) shares of the Common Stock of the Company,
standing in Purchaser’s name on the books of the Company and represented by Certificate No. ___,
and does hereby irrevocably constitute and appoint ____
to transfer said stock on the books of the Company with full power of substitution in the premises.
THIS ASSIGNMENT MAY ONLY BE USED AS AUTHORIZED BY THE AGREEMENT.

	 	 	 	 	 	 	 
	Dated:
	 	 	 	 	 	 
	 

	 	 	 	 	 	 
	 

	 	 	 	 	 	Signature:
	 
	 	 	 	 	 	 
	 

	 	 	 	 	 	 
	 

	 	 	 	 	 	Gregory Demopulos, M.D.
	 
	 	 	 	 	 	 
	 

	 	 	 	 	 	 
	 

	 	 	 	 	 	Spouse of Gregory Demopulos, M.D. (if applicable)

     Instruction: Please do not fill in any blanks other than the signature line. The purpose of this
assignment is to perfect the security interest of the Company pursuant to the Agreement.

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00135-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00135-of-00352.parquet"}]]