Document:

omer_Ex10_1

		

			Exhibit 10.1

		

		

			

		

		
			MASTER
		

		
			SERVICES
		

		
			AGREEMENT
		

		
			between
		

		
			LONZA BIOLOGICS TUAS PTE LTD
		

		
			and
		

		
			OMEROS CORPORATION
		

		
			 
		

		
			 
		

		
			

		 

		

			[***] CERTAIN IDENTIFIED INFORMATION HAS BEEN EXCLUDED FROM THE EXHIBIT BECAUSE IT BOTH (A) IS NOT MATERIAL AND (B) WOULD BE COMPETITIVELY HARMFUL IF PUBLICLY DISCLOSED

		

		

			

		

		

		
			THIS AGREEMENT is made on the 28th day of July 2019 (the “Effective Date”)
		

		
			BETWEEN
		

		
			1. LONZA BIOLOGICS TUAS PTE LTD, of 35 Tuas South Ave 6, SG Singapore 637377 (“Lonza”) and
		

		
			2. OMEROS CORPORATION, of 201 Elliott Avenue West, Seattle, WA 98119, USA (“Omeros”).
		

		
			Omeros and Lonza are hereinafter also collectively referred to as the “Parties” and each individually also as a “Party”.
		

		
			WHEREAS
		

		
			A. Omeros is the proprietor of the human IgG known as narsoplimab (OMS721), an antibody that binds to and inhibits MASP-2; and
		

		
			B. Lonza and its Affiliates have the expertise in the production of monoclonal antibodies for therapeutic use;
		

		
			C. Omeros wishes to contract Lonza for the Launch and commercial supply of narsoplimab and for related support Services, as described in this Agreement; and
		

		
			D. Lonza is prepared to perform such Services for Omeros on the terms and conditions set out herein.
		

		
			NOW IT IS AGREED AS FOLLOWS:
		

		
			1. Definitions and Interpretation
		

		
			The following terms shall have the following meanings unless the context requires otherwise:
		

			
					
						 

					
					
						 

				
	
					
						“Affiliate”

					
					
						means any Company, partnership or other entity which directly or indirectly Controls, is Controlled by or is under common Control with the relevant Party to this Agreement.

				
	
					
						“Agreement”

					
					
						means this agreement incorporating all Appendices and Schedules as amended or varied from time to time by written agreement of the Parties.

				
	
					
						“Applicable Laws”

					
					
						means all applicable laws, including relevant federal, state and local laws, statutes, rules, and regulations which are applicable to a Party’s activities in the Territory hereunder, including, without limitation, the applicable regulations and guidelines of any Governmental Authority, Food and Drug Administration (FDA) and EMA (European Medicines Agency) and all applicable cGMP together with amendments thereto, all of the clauses required to be inserted into this Agreement as set forth in U.S. Federal Acquisition Regulations (FAR) 52.244-6 that are applicable to Lonza for Manufacturing Services at the Facility, which shall be deemed to be inserted herein,  and the United States Foreign Corrupt Practices Act and the UK Bribery Act 2010.

				

		
			 
		

		
			
		

		

		 

		

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						“Approval”

					
					
						means marketing approval by the FDA or the EMA, of Product manufactured at the Facility for commercial supply and the date of first Approval shall be the date on which the earliest of these approvals occurs (hereinafter “First Approval"), but excludes any authorizations for limited distribution, use or sale of Product on an early access, expanded access or compassionate use basis in advance of authorization to broadly market the Product.

				
	
					
						“Batch”

					
					
						means the total Product obtained from one (1) fermentation and associated purification using the Process, which fermentation and purification will be carried out in accordance with cGMP unless otherwise agreed and specified in a SOW.

				
	
					
						“Binding Order”

					
					
						has the meaning given to it in Clause 6 3.2.

				
	
					
						“Biosimilar”

					
					
						means [***].

				
	
					
						“Campaign”

					
					
						means a series of cGMP Batches at the Facility.

				
	
					
						"Cell Line"

					
					
						means the Omeros Cell Line used by Lonza to express Product specified in Specifications Document, and any clones or derivatives thereof.

				
	
					
						 

					
					
						For the purposes of this Agreement, "Omeros Cell Line" means a cell line provided by Omeros and any clones or derivatives thereof, used by Lonza to express Product specified in the Specifications Document.

				
	
					
						“Certificate of Analysis”

					
					
						means a document prepared by Lonza listing and certifying the tests performed by Lonza or approved external laboratories, the Specifications and test results.

				
	
					
						“Certificate of Compliance”

					
					
						means a document prepared by Lonza: (i) listing the manufacturing date, unique Batch number, and concentration of Product in such Batch, (ii) certifying that such Batch was manufactured in accordance with the Master Batch Record and, unless otherwise specified in a SOW for development work, cGMP.

				
	
					
						“cGMP”

					
					
						means those laws and regulations applicable in the U.S. and Europe, relating to the manufacture of medicinal products for human use, including, without limitation, current good manufacturing practices as specified in the ICH guidelines, including without limitation, ICH Q7A “ICH Good Manufacturing Practice Guide for Active Pharmaceutical Ingredients”, US Federal Food Drug and Cosmetic Act at 21CFR (Chapters 210, 211, 600 and 610) and the Guide to Good Manufacturing Practices for Medicinal Products as promulgated under European Directive 91/356/EEC, 2003/94/EC, as amended, and 2001/83/EC, as amended.  For the avoidance of doubt, Lonza’s operational quality standards are defined in internal cGMP policy documents as will be further detailed in the Quality Agreement (as such term is defined in Clause 2.14 herein).

				

		
			 
		

		
			
		

		

		 

		

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						“cGMP Product”

					
					
						means Product that is required under this Agreement or a SOW to be manufactured in accordance with cGMP; for purposes of clarity, all Product manufactured under this Agreement or a SOW shall be manufactured under cGMP unless expressly agreed otherwise in a SOW for development work.

				
	
					
						“Commencement Date”

					
					
						means the date of removal of the vial of cells from frozen storage for the production of a Batch.

				
	
					
						“Competing Contract Manufacturer” 

					
					
						shall mean any Third Party who, together with its Affiliates, undertakes or performs more than fifty per cent (50%) of their business as a Third Party manufacturer of monoclonal antibodies and/or therapeutic proteins or any product of a similar nature to which this Agreement relates.

				
	
					
						“Control”

					
					
						means the ownership of more than fifty percent (50%) of the issued share capital or the legal power to direct or cause the direction of the general management and policies of the Party in question.

				
	
					
						“Development Agreement”

					
					
						means the Master Services Agreement between the Parties dated 1 October 2015 and as subsequently amended, inclusive of the Reservation Letter dated 11 August 2017.

				
	
					
						“Deliver”, “Delivered” or “Delivery”

					
					
						has the meaning given to it in Clause 5.

				
	
					
						“Extension Term” 

					
					
						has the meaning given to it in Clause 12.1.1.

				
	
					
						"External Laboratories" 

					
					
						means any Third Party instructed by Lonza, only with Omeros’ advance written consent, to conduct activities required to complete the Services, including but not limited to, third parties that synthesise DNA or perform tests on the Cell Line, Product or materials derived therefrom.

				
	
					
						“Facility”

					
					
						means Lonza’s manufacturing facilities in [***], or such other Lonza facility as may be mutually agreed upon in writing.

				
	
					
						“Failure Notice”

					
					
						has the meaning given to it in Clause 5.9.

				
	
					
						“Forecast”

					
					
						has the meaning given in to it in Clause 6.2.1.

				
	
					
						“Latent Defect” 

					
					
						means a defect which may be present at Delivery but which cannot be detected at the time of inspection as specified in Clause 5.9 despite diligent inspection by Omeros and which is directly attributable to a breach of Lonza’s obligations under this Agreement. Latent Defect shall exclude any failures due to mishandling, improper storage or contamination of the Product by Omeros or Third Parties after Delivery by Lonza.

				
	
					
						“Launch”

					
					
						means and shall be deemed to occur at such time that (i) the First Approval has been obtained and (ii) the Product has been shipped for commercial sale by or on behalf of Omeros to a wholesaler or hospital. Omeros shall provide notice of such shipment to a wholesaler or hospital in writing to Lonza (such notice not to be unreasonably delayed).  For the avoidance of doubt, Launch excludes any shipment or sale of Product pursuant to authorizations

				

		
			
		

		

		 

		

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						for use, distribution or sale of Product on an early access, expanded access or compassionate use basis.

				
	
					
						“Intellectual Property”

					
					
						means all patents, copyright, rights in designs, know-how, trade secrets, and all other intellectual or industrial property rights, in each case whether registered or unregistered and including applications or rights to apply for them and together with all extensions and renewals of them, and in each and every case all rights or forms of protection having equivalent or similar effect anywhere in the world.

				
	
					
						“Initial Term”

					
					
						has the meaning given to it in Clause 12.1.

				
	
					
						“IP-Respecting Entity”

					
					
						means[***].

				
	
					
						"Lonza Know-How" 

					
					
						means all technical and other information relating directly or indirectly, to the Process and/or the performance of the Services known to Lonza from time to time other than Omeros Information and information in the public domain.

				
	
					
						"Lonza Patent Rights" 

					
					
						means all inventions, patents and patent applications of any kind throughout the world relating to the Process which from time to time Lonza is the owner of or is entitled to use, which for purposes of clarity shall not include inventions, patents and patent applications related to the Process to the extent specific to the Product and not generally applicable to other products.

				
	
					
						“Master Batch Record”

					
					
						means the document, proposed by Lonza and approved by Omeros, which defines the manufacturing methods, test methods and other procedures, directions and controls associated with the manufacture and testing of Product.

				
	
					
						“Minimum Campaign”

					
					
						has the meaning given to it in Clause 6 1.1.

				
	
					
						“Minimum Exclusivity”

					
					
						has the meaning given to it in Clause 4.5.

				
	
					
						“Minimum Order”

					
					
						has the meaning given to it in Clause 6 1.2.

				
	
					
						“New General Intellectual Property”

					
					
						has the meaning given to it in Clause 8.2.

				
	
					
						“New Omeros Intellectual Property”

					
					
						has the meaning given to it in Clause 8.3.

				
	
					
						"Omeros Information" 

					
					
						means all technical and other information that was not known to Lonza independently of Omeros and this Agreement, or that is generated by Lonza for Omeros during the performance of Services under this Agreement, relating to the Product, the Omeros Cell Line, to the extent specific to the Product, from time to time supplied by Omeros to Lonza or generated by Lonza during the term of this Agreement and excluding any  Lonza Know-How, Lonza Patent Rights and New General Application Intellectual Property.

				
	
					
						"Omeros Materials" 

					
					
						means the materials supplied by Omeros to Lonza (if any) and identified as such in a Specifications Document hereto or any SOW or otherwise demonstrated by substantial written evidence to have been provided by Omeros.

				

		
			
		

		

		 

		

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						“Omeros Patent Rights” 

					
					
						means all inventions, patents and patent applications of any kind throughout the world relating to the Product and improvements or modifications thereof, the Omeros Cell Line and improvements or modifications thereof, the Process to the extent specific to the Product, excluding the Lonza Patent Rights, or Lonza Know-How and New General Application Intellectual Property.

				
	
					
						"Price"

					
					
						means the price specified in (i) a SOW for the Services other than Batch manufacture or (ii) a Binding Order in accordance with Schedule 1 for manufacture of Batches.

				
	
					
						"Process" 

					
					
						means the production process for the manufacture of the Product from the Cell Line, including any improvements or modifications thereto from time to time.

				
	
					
						 

					
					
						For the purposes of this Agreement, "Omeros Process" means a Process provided by Omeros for the production of the Product from the Omeros Cell Line, inclusive of adaptations of such process by Lonza to substitute animal components (e.g., amino acids) with non-animal components, and shall, to the extent applicable, be subject to Clause 8.4 below, and "Lonza Process" means a Process provided by or developed by Lonza for the production of Product from the Omeros Cell Line using inter alia Lonza-proprietary media and feeds.

				
	
					
						"Product" 

					
					
						means Omeros’ proprietary narsoplimab (OMS721) antibody to MASP-2 product manufactured using the Process (including any test sample thereof), particulars of which are set out in the Specifications Document and includes all derivatives thereof.

				
	
					
						“Proprietary Feed License”

					
					
						has the meaning given to it in Clause 2.8.

				
	
					
						“Purchase Order”

					
					
						means a purchase order placed by Omeros for the production and delivery of Batches or other Services.

				
	
					
						“Quality Agreement”

					
					
						has the meaning given to it in Clause 2.12.

				
	
					
						“Raw Materials”

					
					
						means those materials procured by Lonza and including those filters and other consumables as required and used by Lonza in the production of the Product at the Facility.

				
	
					
						“Raw Materials Fee”

					
					
						means the procurement and handling fee of [***] of the acquisition cost of Raw Materials by Lonza that is charged to Omeros in addition to the cost of such Raw Materials (excluding Resins, which are not subject to a handling fee).

				
	
					
						“Recall”

					
					
						has the meaning given to it in Clause 5.13.

				
	
					
						“Regulatory Authority(ies)”

					
					
						means the FDA, EMA, European national regulatory authorities, and any other similar regulatory authorities as may be agreed upon in writing by the Parties.

				
	
					
						“Release”

					
					
						has the meaning given to it in Clause 5.1.

				
	
					
						"Resins" 

					
					
						means the purification Resins, UF membranes and any other materials that are used across multiple Batches as part of the provision of Services.

				

		
			
		

		

		 

		

			[***] CERTAIN IDENTIFIED INFORMATION HAS BEEN EXCLUDED FROM THE EXHIBIT BECAUSE IT BOTH (A) IS NOT MATERIAL AND (B) WOULD BE COMPETITIVELY HARMFUL IF PUBLICLY DISCLOSED

		

		

			

		

	
					
						

					
						"Services" 

					
					
						means all or any part of the services performed by Lonza (including, without limitation, cell culture evaluation, purification evaluation, master, working and extended cell bank creation, Processing and sample and bulk production of the Product), particulars of which are set out in one or more SOWs.

				
	
					
						"Specifications" 

					
					
						means all written requirements, standards, quality control testing and other data for Product, particulars of which are set out in Specifications Document.

				
	
					
						“Specifications Document”

					
					
						means the mutually agreed document setting out the requirements, standards, quality control testing and other parameters for the Product, as may be amended from time to time by written agreement of the Parties.

				
	
					
						“Statement of Work” and SOW”

					
					
						means a document setting out particular Services to be performed, including a description of the Services to be performed, any agreed Price and terms of payment for the Services to be performed, and any changes or additions to previously agreed Specifications, which shall be incorporated into this Agreement upon execution by authorized representatives of each Party. In the event of any conflict between the provisions of this Agreement and the provisions of any SOW, the provisions of this Agreement shall control except to the extent that specific terms are expressly indicated in a SOW as superseding terms of this Agreement.

				
	
					
						“Supply Failure”

					
					
						has the meaning given to it in Clause 6 6.1.

				
	
					
						“Term”

					
					
						has the meaning given to it in Clause 12.1.

				
	
					
						“Termination Fee”

					
					
						means the fees payable on termination in accordance with Clause 12.6.

				
	
					
						"Terms of Payment" 

					
					
						means the terms of payment specified in this Agreement with respect to Purchase Orders for Batches and the terms of payment specified in a SOW for other Services. In the event of a conflict between the provisions of this Agreement and the provisions of any Purchase Order or SOW, the provisions of this Agreement shall control.

				
	
					
						“Territory” 

					
					
						means [***] and any other additional territory(ies) for which Omeros provides Lonza with reasonable prior written notice and subject to Lonza’s agreement that it can support such additional territory(ies) (such agreement not to be unreasonably withheld).

				
	
					
						“Third Party”

					
					
						means any party other than Omeros, Lonza and their respective Affiliates.

				

		
			References to the singular number include the plural and vice versa, references to Clauses and Schedules are references to clauses and schedules to this Agreement.
		

		
			2. Provision of the Services
		

		
			2.1 (a)    Lonza shall itself and through its Affiliates, diligently carry out the Services as provided in this Agreement and each SOW, and shall use reasonable endeavours to perform the Services without defect and according to the estimated timelines as set forth in this Agreement and each applicable SOW or Binding Order. Lonza will, in accordance with the terms of this Agreement and the Quality Agreement, manufacture at the Facility and Release to Customer, cGMP Batches that comply with the Master Batch Record, cGMP and the Specifications, and provide a corresponding Certificate of Analysis and Certificate of Compliance for each such cGMP Batch.
		

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

		 

		

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subcontracted services, unless such subcontracted Third Party has been selected by Omeros, in which case Lonza shall not be responsible for such subcontracted services.
		

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

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

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

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

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

		
			2.7          Lonza shall:
		

		
			(a) at all times use commercially reasonable efforts to keep the Cell Line, the Omeros Information and/or Omeros Materials secure and safe from loss and damage in a commercially reasonable manner that is as rigorous as such manner as Lonza stores its own material of similar nature;
		

		
			(b) not part with possession of the Cell Line and/or Omeros Materials or the Product or the Omeros Information, save for the purpose of activities at the authorized External Laboratories or as otherwise authorised in writing by Omeros; and
		

		
			(c) ensure that all External Laboratories are subject to obligations of confidence substantially in the form of those obligations of confidence imposed on Lonza under this Agreement.
		

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

		
			(a)  Omeros Cell Line and Lonza Process.
		

		
			Lonza shall provide notice to Omeros, and obtain Omeros’ consent, prior to the incorporation into the Product or the Process of a material or process that would require a license from Lonza or a Third Party, which notice shall include the proposed license terms for such new material or process applicable to technology transfer in accordance with Clause 12.8  but which, in the case of any new material or process that requires a license from Lonza rather than a Third Party, such license shall be royalty free for the Process during the Term of this Agreement, but Omeros acknowledges that the terms of any license with any such Third Party shall be subject to terms and price to be agreed between Omeros and such Third Party..  If Omeros consents to such terms, the material or process may be incorporated into the Product or the Process; if Omeros does not consent to such terms, Lonza shall continue to manufacture the Product using the Process without such incorporation. Omeros shall have the option to purchase Lonza’s proprietary media and feeds from Lonza or a Third Party supplier. Lonza agrees that it shall make available to Omeros a license for purchase of Lonza’s proprietary feeds from Third Party suppliers or Lonza and to use the Lonza Process in connection with nonclinical and in vivo human clinical research and development, manufacture, marketing and sales and commercialization purposes (a “Proprietary Feed License”).  For current and any future media and feeds, the Proprietary Feed License shall be fully paid up and subject always to Clause 12.8, no royalties or other compensation owed other than as may be charged by Third Party media and feed suppliers for supply of such current media and feeds.  The Proprietary Feed License for any future media and feeds incorporated into the Process after approval by Omeros will be provided on these same terms to the extent that Lonza is able to so provide such terms.  The option to purchase proprietary feeds and the Proprietary Feed License shall be assignable by Omeros to a Third Party which is an IP-Respecting Entity.
		

		
			(b)  Omeros Cell Line and Omeros Process.
		

		
			

		 

		

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			Where the Cell Line is the Omeros Cell Line and Product is produced using the Omeros Process, Lonza acknowledges that, other than as conveyed to Omeros under Clause 8.4 herein, no license shall be required from Lonza for Omeros to exploit the Omeros Cell Line, the Omeros Process or the Product provided that no New General Application Intellectual Property has been applied by Lonza in the Omeros Process other than as provided under Clause 8.4 herein. Subject to the foregoing provision, Omeros shall also have the option to purchase Lonza’s proprietary media and feeds from Lonza or a Third Party supplier and use such media and feeds to modify the Omeros Process. Omeros shall have the right to require a technology transfer in accordance with Clause 12.8. The option to purchase proprietary feeds and the Proprietary Feed License shall be assignable by Omeros to a Third Party which is an IP-Respecting Entity.
		

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

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

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

		
			2.12       The Parties shall enter into a separate quality agreement (the “Quality Agreement”) to define their responsibilities in relation to the disposition of the Product.  In the event of any conflict between the terms of this Agreement and the terms of the Quality Agreement, the terms of the Quality Agreement shall control in relation to the disposition of the Product and this Agreement shall control all other aspects.
		

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

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

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

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

		
			3.  Scale Up Within Lonza Network
		

		
			In the event that the Parties agree to transfer the manufacture of Product to a larger scale at the same Facility or such alternate Lonza facility as may be mutually agreed to meet the supply requirements, then the cost of transferring the manufacture of the Product to the larger scale or from the Facility to such other Lonza facility will be agreed in good faith between the Parties by way of an amendment to this Agreement, with manufacturing at such larger scale or at such other Lonza facility to be undertaken under the terms of this Agreement, amended solely as may be necessary to address such transfer and incorporate applicable adjustments to Batch pricing.
		

		
			4. Omeros Obligations
		

		
			

		 

		

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

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

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

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

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

		
			5. Delivery, Transportation of Product and Omeros Tests
		

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

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

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

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

		
			

		 

		

			[***] CERTAIN IDENTIFIED INFORMATION HAS BEEN EXCLUDED FROM THE EXHIBIT BECAUSE IT BOTH (A) IS NOT MATERIAL AND (B) WOULD BE COMPETITIVELY HARMFUL IF PUBLICLY DISCLOSED

		

		

			

		

		

		
			5.5         If requested in writing by Omeros, Lonza will (acting as agent for Omeros for such purpose) arrange for insurance of Product whilst held by Lonza after Delivery (awaiting transportation) for a maximum of fourteen (14) days on terms equivalent to those under which Lonza insures product prior to Delivery. All additional costs and expenses of whatever nature incurred by Lonza in arranging such insurance shall be charged to Omeros in addition to the Price.
		

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

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

		
			(a) visible damage to or total or partial loss of Product in transit shall be given in writing to Lonza and the carrier within three (3) working days of receipt by Omeros; or
		

		
			(b) non-delivery shall be given in writing to Lonza within ten (10) days after the date of Lonza’s despatch notice, which despatch notice shall be e-mailed contemporaneously with shipment to an Omeros project manager designated by Omeros.
		

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

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

		
			Subject to Clause 2.2, if a  Batch fails to meet the Specification prior to Delivery, or if Omeros has reasonably demonstrated to Lonza that Product that has been Delivered fails to meet Specification and that such failure is not due (in whole or in part) to acts or omissions of Omeros or any Third Party after Delivery, Lonza shall propose to Omeros a schedule for manufacture and Delivery of a  replacement for the failed Batch. Omeros may accept or reject the proposed replacement schedule of any failed Batch.  If Omeros accepts the proposed replacement schedule of any failed Batch, then Lonza shall Process and Deliver the replacement Batch in accordance with the agreed replacement schedule, and following Delivery, Omeros shall pay Lonza the remaining [***] of the Batch Price (taking into account the [***] payment already made by Omeros in respect of the failed Batch), provided, however, that if the agreed scheduled thaw date for the replacement Batch is later than [***] months after the scheduled Commencement Date of the original failed Batch, Lonza shall if requested by Omeros refund the initial [***] payment already made by Omeros and reinvoice Omeros for such payment to be made upon the rescheduled Commencement Date. If Omeros rejects the proposed replacement of any failed Batch, then Lonza shall issue a credit or, if requested by Omeros, pay a refund to Omeros for the amount of the Price previously paid that relates to the production of such failed Batch. In the event that Lonza is required to replace such Product, Lonza shall use all reasonable endeavours to do so with the minimum delay having regard to its commitments to third parties in the timing of such replacement. Omeros shall notify Lonza of any Latent Defect immediately upon discovery. Lonza shall be responsible for Latent Defects which are directly attributable to Lonza’s breach of obligations under this Agreement and Omeros shall have the same remedies available to it hereunder.
		

		
			5.10       Subject to Clause 2.2, if there is any dispute concerning (i) whether Product fails to comply with Specifications or cGMP or (ii) whether such failure is due (in whole or in part) to acts or omissions of Omeros or any Third Party after Delivery, such dispute shall be referred for decision to an independent expert (acting as an expert and not as an arbitrator) to be appointed by agreement between Lonza and Omeros. The costs of such independent expert shall be borne equally between Lonza and Omeros. The decision of such independent expert shall be in writing and, save for manifest error on the face of the decision, shall be binding on both Lonza and Omeros.
		

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

		
			

		 

		

			[***] CERTAIN IDENTIFIED INFORMATION HAS BEEN EXCLUDED FROM THE EXHIBIT BECAUSE IT BOTH (A) IS NOT MATERIAL AND (B) WOULD BE COMPETITIVELY HARMFUL IF PUBLICLY DISCLOSED

		

		

			

		

		

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

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

		
			6.  Minimum Order, Forecasting, Ordering, Rescheduling,  Cancellation,  and Supply Failure
		

		
			6.1         Minimum Order
		

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

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

		
			6.2         Forecasting for Batches
		

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

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

		
			6.2.3      [***].
		

		
			6.3          Purchase Orders
		

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

		
			

		 

		

			[***] CERTAIN IDENTIFIED INFORMATION HAS BEEN EXCLUDED FROM THE EXHIBIT BECAUSE IT BOTH (A) IS NOT MATERIAL AND (B) WOULD BE COMPETITIVELY HARMFUL IF PUBLICLY DISCLOSED

		

		

			

		

		

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

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

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

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

		
			6.4         Rescheduling
		

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

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

		
			6.5         Cancellation of a Batch under Binding Order
		

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

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

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

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

		
			6.6         Supply Failure
		

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

		
			

		 

		

			[***] CERTAIN IDENTIFIED INFORMATION HAS BEEN EXCLUDED FROM THE EXHIBIT BECAUSE IT BOTH (A) IS NOT MATERIAL AND (B) WOULD BE COMPETITIVELY HARMFUL IF PUBLICLY DISCLOSED

		

		

			

		

		

		
			7. Price and Terms of Payment
		

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

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

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

		
			(a) interest shall accrue on any amount overdue of an undisputed invoice at the rate of [***] percent per month, interest to accrue on a day to day basis both before and after judgment and not exceeding more than [***] percent per annum; and
		

		
			(b) Lonza shall, at its sole discretion, and without prejudice to any other of its accrued rights, be entitled to suspend the provision of the Services or to treat this Agreement as repudiated on not less than thirty (30) days’ prior notice in writing to Omeros given at any time thereafter unless such payment default is cured during or after such notice period and prior to repudiation.
		

		
			7.4         Price Adjustments
		

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

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

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

		
			7.5         Invoicing
		

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

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

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

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

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

		
			8. Intellectual Property
		

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

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

		
			

		 

		

			[***] CERTAIN IDENTIFIED INFORMATION HAS BEEN EXCLUDED FROM THE EXHIBIT BECAUSE IT BOTH (A) IS NOT MATERIAL AND (B) WOULD BE COMPETITIVELY HARMFUL IF PUBLICLY DISCLOSED

		

		

			

		

		

		
			8.3         Except for and not including the New General Application Intellectual Property, Omeros shall own all right, title, and interest in (a) any and all Intellectual Property that Lonza and/or its Affiliates conceives, invents, reduces to practice, develops or makes, solely or jointly with Omeros or others, [***] and (b)[***] (collectively, the “New Omeros Intellectual Property”).  Omeros grants to Lonza a non-exclusive, non-transferable, royalty-free license to use the New Omeros Intellectual Property solely to the extent necessary for Lonza to perform its obligations under this Agreement.  No other license to the New Omeros Intellectual Property is hereby granted.  Lonza hereby assigns to Omeros and shall continue to assign to Omeros all of its right, title and interest in any New Omeros Intellectual Property. Lonza shall promptly disclose to Omeros in writing all New Omeros Intellectual Property. Lonza shall execute, and shall require Lonza’s personnel involved in the performance of the Services to execute, any documents required to confirm Omeros’ ownership of the New Omeros Intellectual Property, and any documents required to apply for, maintain and enforce any patent or other right in the New Omeros Intellectual Property. Upon Omeros’ request and at Omeros’ reasonable expense, and at no cost to Lonza, Lonza shall assist Omeros as may be necessary to apply for, maintain and enforce any patent or other right in the New Omeros Intellectual Property. For the avoidance of doubt, the parties agree that the term “New Omeros Intellectual Property” shall not under any circumstances be interpreted or defined to include any “New General Application Intellectual Property”.
		

		
			8.4         [***]
		

		
			9. Warranties and Indemnification
		

		
			9.1         Lonza Warranty. Lonza warrants that:
		

		
			(a) the Services shall be performed in accordance with Clauses 2.1, 2.2 and 2.5;
		

		
			(b) unencumbered title (save for any Intellectual Property rights which may exist) to Product will be conveyed to Omeros upon Delivery;
		

		
			(c) as of the date of this Agreement the Lonza Know How and Lonza Patent Rights are owned by Lonza or Lonza is otherwise entitled to use them for the purposes of providing Services under this Agreement and during the term of this Agreement Lonza shall not do or cause anything to be done that would adversely affect their ownership or entitlement to use the same for those purposes;
		

		
			(d) Lonza has the necessary corporate authorisations to enter into this Agreement;
		

		
			(e) as of the date of this Agreement to the best of Lonza’s knowledge and belief, the use by Lonza of the Process (excluding any modifications or steps made or developed by Omeros, Omeros Materials, Omeros Information and Omeros Patent Rights), and Lonza Patent Rights and Lonza Know How for the performance of the Services as provided herein will not infringe any rights (including without limitation any intellectual or industrial property rights) vested in any Third Party;
		

		
			(f) Lonza will notify Omeros in writing immediately if it receives or is notified of a claim from a Third Party that the use by Lonza of the Process and/or the Lonza Know How or the Lonza Patent Rights for Services infringes any Intellectual Property rights vested in such Third Party;
		

		
			(g) subject to Clause 2.2 and at the time of Delivery by Lonza, Product shall have been Processed in accordance with Applicable Laws and in conformance with the Specifications, and shall not be adulterated, misbranded or mislabelled within the meaning of Applicable Laws or misused, contaminated, tampered with or otherwise altered or mishandled while in the custody and control of Lonza, provided, that Lonza shall not be liable for defects attributable to Omeros Materials or a breach of representations and warranties made by Omeros under this Agreement;
		

		
			(h) none of Lonza’s officers, directors, employees or, to Lonza’s knowledge, direct subcontractors, providing Services under this Agreement, or Affiliates has been debarred or, to Lonza’s knowledge, threatened with debarment under the United States Generic Drug Enforcement Act or convicted of a crime which could lead to debarment, and it has not utilized, and will not utilize, the services of any individual or entity in the performance of any SOW that has been debarred or threatened with debarment under the United States Generic Drug Enforcement Act, convicted of a crime that could lead to debarment by the FDA, and in the event that Lonza receives notice of the debarment or threatened debarment of any individual or entity utilized by Lonza in connection with the Services, Lonza shall notify Omeros in writing immediately, and Omeros shall have the right to terminate this Agreement upon written notice in accordance with Clause 12.2 of this Agreement, and make payments to Lonza of all accrued and unpaid obligations up to the date of termination without any further financial penalties;
		

		
			(i) each Certificate of Analysis and Certificate of Compliance will be true and correct and accurately reflect the results of the tests conducted on the Batch of Product to which it relates, and the records Delivered to Omeros will accurately reflect in all 

		 

		

			[***] CERTAIN IDENTIFIED INFORMATION HAS BEEN EXCLUDED FROM THE EXHIBIT BECAUSE IT BOTH (A) IS NOT MATERIAL AND (B) WOULD BE COMPETITIVELY HARMFUL IF PUBLICLY DISCLOSED

		

		

			

		

material respects the processes and procedures followed by Lonza in Processing Product as set forth in the SOW, Master Batch Record and Specifications; and
		

		
			(j) Lonza has obtained (or will obtain prior to Processing Product or performance of other Services), and will remain in compliance with during the term of this Agreement, all permits, licenses and other authorizations which are required under Applicable Laws for the provision of the Services under this Agreement.
		

		
			9.2         Omeros Warranty. Omeros warrants that:
		

		
			(a) Omeros has and shall at all times throughout the term of this Agreement have the right to supply the Omeros Cell Line, the other Omeros Materials and the Omeros Information to Lonza and the necessary rights to license or permit Lonza to use the same for the purpose of the Services;
		

		
			(b) Omeros has the necessary corporate authorisations to enter into this Agreement;
		

		
			(c) any of the Omeros Cell Line, the other Omeros Materials, Omeros Information and Omeros Patent Rights not owned by Omeros are licensed to Omeros under a license which will permit their use by Lonza to perform the Services;
		

		
			(d) to the best of Omeros' knowledge and belief, the use by Lonza of the Omeros Cell Line, other Omeros Materials, Omeros Information and Omeros Patent Rights for the Services (including without limitation the Processing of the Product) will not infringe any Intellectual Property rights of any Third Party (provided, however, that Lonza shall waive any breach of this warranty that arises if a court of competent jurisdiction determines that the use by Lonza of the Omeros Cell Line, other Omeros Materials, Omeros Information or Omeros Patent Rights for the Services infringes the Intellectual Property rights of a Third Party, provided that and for so long as Omeros actually indemnifies Lonza pursuant to Clause 9.5 below); and
		

		
			(e) Omeros will promptly notify Lonza in writing if it receives or is notified of a claim from a Third Party that the Omeros Cell Line, other Omeros Materials, Omeros Information or the Omeros Patent Rights or that the use by Lonza thereof for the provision of the Services infringes any Intellectual Property rights of such Third Party.
		

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

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

		
			9.5         Indemnification by Omeros. Subject to Clauses 9.6 and 9.7 below, Omeros shall defend, indemnify and hold harmless each of Lonza (including Affiliates) and its directors, officers, and employees and the successors and assigns of any of the foregoing (each a “Lonza Indemnitee”) from and against (i) any Third Party claim, loss, damage, costs and expenses of any nature (including court costs and legal fees on a full indemnity basis), arising directly out of any breach of the warranties given by Omeros in Clause 9.2 above or (ii) any Third Party claims alleging Lonza’s use of the Omeros Cell Line, the Omeros Materials or the Omeros Information infringes any rights (including, without limitation, any intellectual property rights) vested in any Third Party (whether or not Omeros knows or ought to have known about the same) provided that for purposes of clarity there shall be excluded from this indemnity all Lonza actual or potential revenues other than those which are an integral part of any Price or fees that Omeros is obliged to pay to Lonza under this Agreement, in each case, to the extent that such claims resulted from the negligence, intentional misconduct or breach of this Agreement by the Lonza Indemnitee. Omeros shall further indemnify and maintain Lonza promptly indemnified against all Third Party claims, actions, costs, expenses (including court costs and legal fees on a full indemnity basis) or other liabilities whatsoever in respect of:
		

		
			

		 

		

			[***] CERTAIN IDENTIFIED INFORMATION HAS BEEN EXCLUDED FROM THE EXHIBIT BECAUSE IT BOTH (A) IS NOT MATERIAL AND (B) WOULD BE COMPETITIVELY HARMFUL IF PUBLICLY DISCLOSED

		

		

			

		

		

		
			(a) any product liability in respect of Product, unless such liability is caused by the negligent act or omission of Lonza in the Processing and/or supply of Product; and
		

		
			(b) any negligent or wilful act or omission of Omeros in relation to the use, Processing, storage or sale of the Product.
		

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

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

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

		
			10. Confidentiality
		

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

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

		
			10.3       Lonza and Omeros each undertake not to disclose or permit to be disclosed to any Third Party (including, except as provided in Clause 10.2 above, any contractors or consultants not previously approved in writing by the Parties, such approval not to be unreasonably withheld or delayed), or otherwise make use of or permit to be made use of other than for purposes of performance under this Agreement (a) any trade secrets or confidential information relating to the technology, business affairs or finances of the other, any subsidiary, holding company or subsidiary or any such holding company of the other, or of any suppliers, agents, distributors, licensees or other customers of the other which comes into its possession under this Agreement or (b) the commercial terms of this Agreement except as required to be disclosed by applicable laws or regulations; provided, however, that, except for filings required under the United States Securities Exchange Act of 1934 and applicable rules promulgated 

		 

		

			[***] CERTAIN IDENTIFIED INFORMATION HAS BEEN EXCLUDED FROM THE EXHIBIT BECAUSE IT BOTH (A) IS NOT MATERIAL AND (B) WOULD BE COMPETITIVELY HARMFUL IF PUBLICLY DISCLOSED

		

		

			

		

thereunder, in each case to any extent that such information is required to be disclosed pursuant to subpoena, court order, judicial process or otherwise by law, provided the receiving Party provides prompt notice to the disclosing Party of such requirement in order to give the disclosing Party an opportunity to timely seek a protective order or other appropriate judicial relief. In the event the disclosing Party is unable to obtain a protective order or other appropriate judicial relief, the receiving Party shall disclose only that portion of the disclosing Party’s confidential information which is legally required to be disclosed, and ensure that all such confidential information of the disclosing Party shall be redacted to the fullest extent permitted by law prior to such disclosure and that the disclosing Party shall be given an opportunity to review the confidential information prior to its disclosure.
		

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

		
			(a) is or becomes generally available to the public otherwise than by reason of a breach by the receiving Party of the provisions of this Clause 10;
		

		
			(b) is known to the receiving Party and is at its free disposal prior to its receipt from the disclosing Party;
		

		
			(c) is subsequently disclosed to the receiving Party without being made subject to an obligation of confidence by a third Party;
		

		
			(d) Lonza or Omeros may be required to disclose under any statutory, regulatory or similar legislative requirement, subject to the imposition of obligations of secrecy wherever possible in that relation; or
		

		
			(e) is developed by any servant or agent of the receiving Party without access to or use or knowledge of the information by the disclosing Party.
		

		
			10.5       The Parties acknowledge that:
		

		
			(a) without prejudice to any other rights and remedies that the Parties may have, the Parties agree that the Lonza Know-How and Omeros Information is valuable and that damages may not be an adequate remedy for any breach of the provisions of this Clause 10. The Parties agree that the relevant Party will be entitled without proof of special damage to seek the remedies of an injunction and other equitable relief for any actual or threatened breach by the other Party;
		

		
			(b) save as provided herein Lonza shall not at any time have any right, title, license or interest in or to Omeros Information, Omeros Patent Rights or any other intellectual property rights vested in Omeros or to which Omeros is entitled; and
		

		
			(c) Omeros shall not at any time have any right, title, license or interest in or to Lonza Know-How, the Lonza Patent Rights or any other intellectual property rights relating to the Process which are vested in Lonza or to which Lonza is otherwise entitled.
		

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

		
			11.  Audits, Inspections and Records
		

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

		
			11.2       Each Party shall notify the other Party promptly of any inspection or inquiry by any Regulatory Authority concerning the Lonza Facilities to the extent pertaining to processing of cell banks, drug substance or drug product, any SOW or Processing of Product and as set out further in a separate Quality Agreement.  Each Party shall cooperate with Regulatory Authorities in connection with any such inspection or inquiry and shall cooperate with the other Party in providing the information needed for any 

		 

		

			[***] CERTAIN IDENTIFIED INFORMATION HAS BEEN EXCLUDED FROM THE EXHIBIT BECAUSE IT BOTH (A) IS NOT MATERIAL AND (B) WOULD BE COMPETITIVELY HARMFUL IF PUBLICLY DISCLOSED

		

		

			

		

response.  Each Party acknowledges that it may not direct the manner in which the other Party fulfils its obligations to permit inspection by a Regulatory Authority.
		

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

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

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

		
			12.  Term and Termination
		

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

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

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

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

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

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

		
			(a) if the other commits a material breach of the Agreement (which shall include a breach of the warranties set out in Clause 9 above) which in the case of a breach capable of remedy is not remedied within [***] days of the receipt by the other of notice identifying the breach and requiring its remedy  (reasonable efforts to cure said breach shall be made within [***]  days of receipt of notice); or
		

		
			(b) if the other ceases for any reason to carry on business or compounds with or convenes a meeting of its creditors or has a receiver or manager appointed in respect of all or any part of its assets or is the subject of an application for an administration order or of any proposal for a voluntary arrangement or enters into liquidation (whether compulsorily or voluntarily) or undergoes any analogous act or proceedings under foreign law; or
		

		
			

		 

		

			[***] CERTAIN IDENTIFIED INFORMATION HAS BEEN EXCLUDED FROM THE EXHIBIT BECAUSE IT BOTH (A) IS NOT MATERIAL AND (B) WOULD BE COMPETITIVELY HARMFUL IF PUBLICLY DISCLOSED

		

		

			

		

		

		
			(c) if the Product is withdrawn from US and EU markets following First Approval, any Batches ordered at the time of termination may be cancelled by Omeros and shall be subject to the termination provisions herein and any Raw Materials received or irrevocably committed shall be paid to the extent specified in the termination provisions herein.
		

		
			12.6       Consequences of termination.
		

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

		
			(a) all Services rendered up to the date of termination, including in respect of any Product in-process;
		

		
			(b) all costs incurred through the date of termination, including Raw Materials costs and Raw Materials Fees for Raw Materials used or purchased or to which Lonza is irrevocably committed for use in connection with the Services;
		

		
			(c) all unused Raw Materials and Resins shall be paid for by Omeros within [***]  days of invoice and at Omeros’ option will either be: (a) held by Lonza for future use for the production of Product; (b) delivered to Omeros; or (c) disposed of by Lonza.
		

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

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

		
			12.6.4.  Termination due to Market Withdrawal.  If Omeros withdraws the Product from the U.S.  and European Union markets or is directed to do so by any regulatory agency and as a result, Omeros or Lonza terminates the Agreement in accordance with Clause 12.5(c), then Omeros shall pay a termination fee in the amount of [***]% of the Batch Price for all  Batches under a Binding Order. Lonza shall use commercially reasonable efforts to try and secure a replacement reservation from a new project, whilst observing its contractual commitments of other customers, and if it is able to secure such replacement reservation Omeros shall be relieved proportionally of its obligation to pay a termination fee.
		

		
			12.7       Upon the termination of the Agreement for whatever reason:
		

		
			(a) Lonza shall promptly return to Omeros all Omeros Information and shall dispose of or return to Omeros the Omeros Materials (and where supplied by Omeros the Cell Line) and any materials therefrom, as directed by Omeros;
		

		
			(b) Omeros shall promptly return to Lonza all Lonza Know-How it has received from Lonza, except for that included as part of license provided for in Clauses 2.8(a), and 2.8 (b), as applicable, or as part of the license to the New General Application Intellectual Property provided for in Clause 8.4;
		

		
			(c) Omeros shall not thereafter use or exploit the Lonza Patent Rights or the Lonza Know-How in any way whatsoever, except for that included as part of license provided for in Clauses 2.8(a), and 2.8 (b), as applicable, or as part of the license to the New General Application Intellectual Property provided for in Clause 8.4;  and
		

		
			(d) Lonza and Omeros shall do all such acts and things and shall sign and execute all such deeds and documents as the other may reasonably require to evidence compliance with this Clause 12.7.
		

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

		
			

		 

		

			[***] CERTAIN IDENTIFIED INFORMATION HAS BEEN EXCLUDED FROM THE EXHIBIT BECAUSE IT BOTH (A) IS NOT MATERIAL AND (B) WOULD BE COMPETITIVELY HARMFUL IF PUBLICLY DISCLOSED

		

		

			

		

		

		
			(a) is an IP-Respecting Entity;
		

		
			(b) is listed on Schedule 3 hereto, as the same may be updated from time-to-time by written agreement of the Parties; or
		

		
			(c) is consented to by Lonza in writing, such consent not to be unreasonably withheld or delayed, and Lonza shall not be considered to be unreasonably withholding its consent if (inter alia) Omeros wishes to transfer the Cell Line and the Process to any legal person or entity which is not an IP-Respecting Entity;
		

		
			provided always, however, to the extent such technology transfer includes Lonza‘s Confidential Information, Lonza’s Intellectual Property and/or New General Application Intellectual Property such technology transfer shall be subject to a royalty and licensing fee for the purchase of media and feeds as provided for in Clauses 2.8(a) or 2.8(b), as applicable, and at all times shall also be subject to the outline technology transfer terms set forth in Schedule 2 hereto.
		

		
			Lonza shall diligently provide reasonably necessary documents to complete such technology transfer and reasonable assistance to complete such technology transfer, provided that Omeros shall reimburse Lonza for any costs based on Lonza’s standard full-time employee rate for such support which is applicable at the date of such technology transfer and the outline technology transfer terms of Schedule 2.
		

		
			For purposes of clarity, the outline technology transfer terms of Schedule 2 shall not apply if Omeros transfers the Cell Line to a Third Party without any transfer of the Process.
		

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

		
			13. Force Majeure
		

		
			13.1       If either Party is prevented or delayed in the performance of any of its obligations under the Agreement by Force Majeure it shall give written notice thereof to the other Party specifying the matters constituting Force Majeure together with such evidence as it reasonably can give and specifying the period for which it is estimated that such prevention or delay will continue, and it shall be excused from the performance or the punctual performance of such obligations as the case may be from the date of such notice for so long as such cause of prevention or delay shall continue.  The Party that may invoke this clause shall use commercially reasonable efforts to reinstate its ongoing obligations to the other Party as soon as practicable.  If the cause(s) shall continue unabated for 180 days, then both Parties shall meet to discuss and negotiate in good faith what modifications to this Agreement should result from such cause(s) and if not resolvable either Party shall have the right to terminate this Agreement.
		

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

		
			14. Governing Law, Jurisdiction and Enforceability
		

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

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

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

		
			14.4       If a dispute arises between the Parties that the Parties cannot resolve pursuant to Clause 14.3 above, the Parties agree to attempt in good faith to resolve such dispute by mediation administered by the CPR Institute for Dispute Resolution, 366 Madison Avenue, New York, NY 10017, in New York, New York, USA. The Parties agree that they shall share equally the cost of any mediation fees, and the cost of the mediator. Each Party must bear its own attorneys’ fees and associated costs and expenses. The place of any mediation shall be New York, New York, USA. If efforts at mediation are unsuccessful within sixty (60) days of either Party referring the dispute to mediation, then either Party may require that the dispute shall be resolved by binding 

		 

		

			[***] CERTAIN IDENTIFIED INFORMATION HAS BEEN EXCLUDED FROM THE EXHIBIT BECAUSE IT BOTH (A) IS NOT MATERIAL AND (B) WOULD BE COMPETITIVELY HARMFUL IF PUBLICLY DISCLOSED

		

		

			

		

arbitration in accordance with the then existing commercial arbitration rules of CPR Institute for Dispute Resolution, 366 Madison Avenue, New York, NY 10017. Arbitration shall be conducted in New York, New York, USA.
		

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

		
			15. Notices
		

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

		
			(a) If to Lonza to:
		

		
			LONZA BIOLOGICS TUAS PTE LTD
		

		
			35 Tuas South Ave 6,
		

		
			SG Singapore, 637377
		

		
			With a copy to:
		

		
			Lonza Biologics plc
		

		
			228 Bath Road
		

		
			Slough
		

		
			Berkshire SL1 4DX
		

		
			England
		

		
			For the attention of: The Head of Legal Services
		

		
			(b) If to Omeros to:
		

		
			Omeros Corporation
		

		
			201 Elliott Avenue West
		

		
			Seattle, WA 98119, USA
		

		
			For the attention of: General Counsel
		

		
			With a concurrent copy by e-mail (which shall not constitute notice) to generalcounsel@omeros.com,
		

		
			or to such other destination as either Party hereto may hereafter notify to the other in accordance with the provisions of this Clause 15.
		

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

		
			(a) if delivered personally, at the time of such delivery;
		

		
			(b) if sent by first class pre-paid post, ten (10) business days (Saturdays, Sundays and Bank or other public holidays excluded) after being placed in the post.
		

		
			16. Illegality
		

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

		
			(a) such provision shall, so far as it is illegal, invalid or unenforceable, be given no effect by the Parties and shall be deemed not to be included in this Agreement;
		

		
			(b) the other provisions of this Agreement shall be binding on the Parties as if such provision was not included therein; and
		

		
			(c) the Parties agree to negotiate in good faith to amend such provision to the extent possible for incorporation herein in such reasonable manner as most closely achieves the intention of the Parties without rending such provision invalid or unenforceable.
		

		
			17. Miscellaneous
		

		
			17.1       Lonza shall be entitled to instruct one of more of its Affiliates to perform any of Lonza’s obligations contained in this Agreement within the same Lonza Facility in which Product is Manufactured, subject to Omeros’ approval, which shall not be unreasonably withheld or delayed, of the use of such Affiliate at any other Facility or transfer of any aspect of Manufacturing to any other of Lonza’s or its Affiliates’ Facility, with no increase in costs, but Lonza shall remain fully responsible in respect of those 

		 

		

			[***] CERTAIN IDENTIFIED INFORMATION HAS BEEN EXCLUDED FROM THE EXHIBIT BECAUSE IT BOTH (A) IS NOT MATERIAL AND (B) WOULD BE COMPETITIVELY HARMFUL IF PUBLICLY DISCLOSED

		

		

			

		

obligations. Subject thereto, neither Party shall be entitled to assign, transfer, charge or in any way assign, sub-contract, transfer or delegate the benefit and/or the burden of this Agreement without the prior written consent of the other which consent shall not be unreasonably withheld or delayed, save that:
		

		
			(a) Lonza shall be entitled without the prior written consent of the Omeros to assign, transfer, charge, sub-contract, deal with or in any other manner make over the benefit and/or burden of this Agreement (i) to an Affiliate or (ii) to any joint venture company of which Lonza, is the beneficial owner of at least fifty percent (50%) of the issued share capital thereof or (iii) to any company with which Lonza may merge or (iv) to any company to which Lonza may transfer its assets and undertaking; provided however in each case such assignee must be an IP Respecting Entity; and
		

		
			(b) Omeros shall be entitled to assign this Agreement, including all rights and obligations arising thereunder, to any Third Party that:-
		

		
			(i) is an IP-Respecting Entity and is not a Competing Contract Manufacturer,
		

		
			(ii) is listed on Schedule 3 hereto, as the same may be updated from time-to-time by written agreement of the Parties,
		

		
			(iii) is consented to by Lonza, such consent not to be unreasonably withheld or delayed, provided that Lonza shall not be considered to be unreasonably withholding its consent if (inter alia) Omeros wishes to assign this Agreement to any legal person or entity which is (i) a Competing Contract Manufacturer, or (ii) not an IP-Respecting Entity; or
		

		
			(iv) is in connection with the sale or transfer (by whatever method) of all or substantially all of the business related to the subject matter of this agreement; provided, further, that such Affiliate or Third Party, as applicable, acknowledges and assumes in writing all of the assigning Party’s obligations under the Agreement.  For purposes of this Clause 17.1, the terms “assign” and “assignment” shall include, without limitation (i) the sale, exchange, transfer or issuance of fifty percent (50%) or more of the outstanding stock of such Party to an Affiliate of such Party or an unrelated entity or natural person, (ii) the sale or transfer or other disposition of all or substantially all of the assets of the Party or the line of business or Product to which this Agreement relates, and (iii) a merger, consolidation, acquisition or other form of business combination.  Any purported assignment in violation of the foregoing shall be void.  No assignment shall relieve any Party of responsibility for the performance of any obligation that accrued prior to the effective date of such assignment. Subject to the foregoing, this Agreement shall bind and inure to the benefit of the respective Parties and their successors and permitted assigns.
		

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

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

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

		
			17.5       The Parties to this Agreement do not intend that any term hereof should be enforceable by virtue of the Contracts (Rights of Third Parties) Act 1999 by any person who is not a Party to this Agreement.
		

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

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

		
			

		 

		

			[***] CERTAIN IDENTIFIED INFORMATION HAS BEEN EXCLUDED FROM THE EXHIBIT BECAUSE IT BOTH (A) IS NOT MATERIAL AND (B) WOULD BE COMPETITIVELY HARMFUL IF PUBLICLY DISCLOSED

		

		

			

		

		

		
			[Remainder of Page Intentionally Blank]
		

		
			
		

		
			

		 

		

			[***] CERTAIN IDENTIFIED INFORMATION HAS BEEN EXCLUDED FROM THE EXHIBIT BECAUSE IT BOTH (A) IS NOT MATERIAL AND (B) WOULD BE COMPETITIVELY HARMFUL IF PUBLICLY DISCLOSED

		

		

			

		

		

		
			AS WITNESS the hands of the duly authorised representatives of the Parties hereto the day and year first above written.
		

			
					
						 

					
					
						 

				
	
					
						OMEROS CORPORATION 

					
					
						LONZA BIOLOGICS TUAS PTE LTD

				
	
					
						 

					
					
						 

				
	
					
						Signature: /s/ Gregory A. Demopulos

					
					
						Signature: /s/ [***]

				
	
					
						Printed Name: Gregory A. Demopulos, M.D.

					
					
						Printed Name: [***]

				
	
					
						Title: Chairman & CEO

					
					
						Title: General Manager, [***]

				

		
			 
		

		
			
		

		
			

		 

		

			[***] CERTAIN IDENTIFIED INFORMATION HAS BEEN EXCLUDED FROM THE EXHIBIT BECAUSE IT BOTH (A) IS NOT MATERIAL AND (B) WOULD BE COMPETITIVELY HARMFUL IF PUBLICLY DISCLOSED

		

		

			

		

		

		
			SCHEDULE 1
		

		
			PRICING
		

		
			[***]
		

		
			

		 

		

			[***] CERTAIN IDENTIFIED INFORMATION HAS BEEN EXCLUDED FROM THE EXHIBIT BECAUSE IT BOTH (A) IS NOT MATERIAL AND (B) WOULD BE COMPETITIVELY HARMFUL IF PUBLICLY DISCLOSED

		

		

			

		

SCHEDULE 2
		

		
			OUTLINE TERMS FOR TECHNOLOGY TRANSFER FROM LONZA TO CUSTOMERS
		

		
			[***]
		

		
			
		

		
			

		 

		

			[***] CERTAIN IDENTIFIED INFORMATION HAS BEEN EXCLUDED FROM THE EXHIBIT BECAUSE IT BOTH (A) IS NOT MATERIAL AND (B) WOULD BE COMPETITIVELY HARMFUL IF PUBLICLY DISCLOSED

		

		

			

		

		

		
			SCHEDULE 3
		

		
			APPROVED THIRD PARTIES
		

		
			[***]
		

		 

		

			[***] CERTAIN IDENTIFIED INFORMATION HAS BEEN EXCLUDED FROM THE EXHIBIT BECAUSE IT BOTH (A) IS NOT MATERIAL AND (B) WOULD BE COMPETITIVELY HARMFUL IF PUBLICLY DISCLOSEDExhibit 4.1

 

[FACE OF NOTE]

 

UNLESS THIS NOTE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION (“DTC” OR THE “DEPOSITARY”), TO THE COMPANY OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE, OR PAYMENT, AND ANY NOTE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE, OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.

 

UNLESS AND UNTIL IT IS EXCHANGED IN WHOLE OR IN PART FOR SECURITIES IN DEFINITIVE REGISTERED FORM, THIS SECURITY MAY NOT BE TRANSFERRED EXCEPT AS A WHOLE BY THE DEPOSITARY TO A NOMINEE OF THE DEPOSITARY OR BY A NOMINEE OF THE DEPOSITARY TO THE DEPOSITARY OR ANOTHER NOMINEE OF THE DEPOSITARY OR BY THE DEPOSITARY OR ANY SUCH NOMINEE TO A SUCCESSOR DEPOSITARY OR A NOMINEE OF SUCH SUCCESSOR DEPOSITARY.

 

	
REGISTERED
    	
 
    	
PRINCIPAL AMOUNT: $500,000,000
    
	
NO. FXR-
    	
 
    	
CUSIP: 22550L2A8
    
	
 
    	
 
    	
ISIN: US22550L2A85
    

 

CREDIT SUISSE AG, acting through its
 New York Branch
 SENIOR MEDIUM-TERM NOTE

(FIXED RATE)

 

2.100% Senior Note due 2021

 

Branch: New York

 

Form of Note: Book-Entry Note

 

Original Issue Date (Settlement Date):  November 12, 2019

 

Specified Currency:            x U.S. dollars      o Other:

 

Authorized Denominations:                                          o U.S. $2,000 and integral multiples of U.S. $1,000 in excess thereof 
  x Other: U.S. $250,000 and integral multiples of U.S. $1,000 in excess thereof

 

 

Maturity Date: November 12, 2021

 

Interest Payment Date(s): November 12 and May 12 of each year, beginning May 12, 2020

 

	
Interest Rate: 2.100 %
    	
 
    	
 
    	
 
    	
 
    
	
Day Count:
    	
 
    	
x   30/360
    	
 
    	
 
    
	
 
    	
 
    	
o   Other:
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
Indexed Note:
    	
 
    	
 ̈   Yes
    	
 
    	
x   No
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
Manner of Determining   Principal Amount Payable at Maturity Date:
    
	
Manner of   Determining Interest Payable at Interest Payment Date:
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
Dual Currency Note:
    	
 
    	
o   Yes
    	
 
    	
x   No
    
	
Optional Payment   Currency:
    
	
Optional   Election Date:
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
Amortizing Note:
    	
 
    	
 ̈   Yes
    	
 
    	
x   No
    
	
Amortizing   Schedule:
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
Original Issue Discount Note: 
    	
 
    	
o   Yes
    	
 
    	
x   No
    
	
Issue Price:
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
Renewable Note:
    	
 
    	
 ̈   Yes
    	
 
    	
x   No
    
	
Initial Maturity   Date:
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
Optional Redemption:
    	
 
    	
o   Yes
    	
 
    	
x No
    
	
Initial   Redemption Date:
    
	
Initial   Redemption Percentage:        %
    
	
Annual   Redemption Percentage Reduction:
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
Optional Repayment:
    	
 
    	
o   Yes
    	
 
    	
x   No
    
	
Optional   Repayment Date(s):
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
Optional Extension of Maturity:
    	
 
    	
o   Yes
    	
 
    	
x   No
    
	
Final Maturity   Date:
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
Addendum Attached:
    	
 
    	
o   Yes
    	
 
    	
x   No
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
Exchange Rate Agent:
    	
 
    	
 
    	
 
    	
 
    

 

2

 

Other Provisions:

 

Tax redemption

 

This Note may be redeemed at the option of the Company (as defined below) at any time, in whole but not in part, on giving not less than 30 nor more than 60 days’ notice, at the principal amount of this Note being redeemed, together with accrued interest to the date of redemption, if it has or will become obligated to pay additional amounts on this Note as described under “—Payment of Additional Amounts” below as a result of any change in, or amendment to, the laws (or any regulations or rulings promulgated thereunder) of the United States or Switzerland, as applicable, or any political subdivision or taxing authority thereof or therein, or any change in the application or official interpretation of such laws, regulations or rulings, which change or amendment becomes effective on or after November 4, 2019, and such obligation cannot be avoided by the Company taking reasonable measures available to it, provided that no such notice of redemption will be given earlier than 90 days prior to the earliest date on which it would be obliged to pay such additional amounts were a payment in respect of this Note then due.

 

Prior to the giving of any notice of such redemption, the Company will deliver to the Trustee (as defined below) a certificate stating that it is entitled to effect such redemption and setting forth a statement of facts showing that the conditions precedent to its right to redeem have occurred, and an opinion of independent counsel of recognized standing to the effect that the Company has or will become obligated to pay such additional amounts as a result of such change or amendment.

 

Payment of Additional Amounts

 

All payments of principal and interest in respect of this Note will be made by the Company free and clear of, and without withholding or deduction for, or on account of, any present or future taxes, duties, assessments or governmental charges of whatever nature imposed, levied, collected, withheld or assessed by or on behalf of Switzerland or the United States (each a “Relevant Jurisdiction”), any political subdivision thereof or any authority therein or thereof having the power to tax, unless the withholding or deduction of such taxes, duties, assessments or governmental charges is required by law. In that event, the Company will pay such additional amounts as will result in receipt by the Holder (as defined below) of such amounts as would have been received by the Holder had no such withholding or deduction been required.

 

Notwithstanding the above, no such additional amounts will be payable by the Company to the Holder for or on account of:

 

(1)                     any tax, assessment or other governmental charge that would not have been imposed but for (a) the existence of any present or former connection between such Holder and the United States, including, without limitation, such Holder being or having been a citizen or resident thereof or being or having been engaged in trade or business or present therein or having or having had a permanent establishment therein, or (b) such Holder’s past or present status as a personal holding company, foreign personal holding

 

3

 

company or private foundation or other tax-exempt organization with respect to the United States or as a corporation that accumulates earnings to avoid U.S. federal income tax;

 

(2)                     any estate, inheritance, gift, sales, transfer or personal property tax or any similar tax, assessment or other governmental charge;

 

(3)                     any tax, assessment or other governmental charge that would not have been imposed but for the presentation by the Holder of this Note for payment more than 15 days after the date on which such payment became due and payable or on which payment thereof was duly provided for, whichever occurs later;

 

(4)                     any tax, assessment or other governmental charge that is payable otherwise than by deduction or withholding from a payment on this Note;

 

(5)                     any tax, assessment or other governmental charge required to be deducted or withheld by any paying agent from a payment on this Note, if such payment can be made without such deduction or withholding by any other paying agent;

 

(6)                     any tax, assessment or other governmental charge that would not have been imposed but for a failure to comply with any applicable certification, documentation, information or other reporting requirement concerning the nationality, residence, identity or connection with the United States of the Holder or beneficial owner of this Note if, without regard to any tax treaty, such compliance is required by statute or regulation of the United States as a precondition to relief or exemption from such tax, assessment or other governmental charge;

 

(7)                     any tax, assessment or other governmental charge imposed on a Holder of this Note that actually or constructively owns 10 percent or more of the combined voting power of all classes of the Company’s  stock or that is a controlled foreign corporation (as defined in Section 957 of the Internal Revenue Code of 1986, as amended (the “Code”)) related to the Company through such ownership;

 

(8)                     any such taxes, duties, assessments or other governmental charges required to be deducted or withheld from a payment or deemed payment that is treated as a “dividend equivalent” payment under the Code, Treasury regulations, or other law or official guidance of the United States;

 

(9)                     any such withholding or deduction imposed on any payment by reason of the Foreign Account Tax Compliance Act (“FATCA”); or

 

(10)              any combination of two or more items (1) through (9) above;

 

4

 

nor will such additional amounts be paid with respect to a payment on this Note to a Holder of this Note that is a fiduciary or partnership or other than the sole beneficial owner of such payment to the extent a beneficiary or settlor with respect to such fiduciary or a member of such partnership or a beneficial owner would not have been entitled to such additional amounts had such beneficiary, settlor, member or beneficial owner been the Holder of this Note.   In addition, no such additional amounts will be payable for or on account of:

 

(1)                     any such taxes, duties, assessments or other governmental charges imposed in respect of this Note by reason of the Holder of this Note having some connection with Switzerland other than the mere holding of this Note;

 

(2)                     any such taxes, duties, assessments or other governmental charges imposed in respect of this Note  presented for payment more than 30 days after the Relevant Date (as defined below) except to the extent that the Holder of this Note would have been entitled to such additional amounts on presenting this Note for payment on the last day of such period of 30 days;

 

(3)                     any such taxes, duties, assessments or other governmental charges imposed in respect of the relevant debt security pursuant to laws enacted by Switzerland providing for the taxation of payments according to principles similar to those laid down in the draft legislation of the Swiss Federal Council on December 17, 2014, or otherwise changing the Swiss federal withholding tax system from an issuer based system to a paying agent-based system pursuant to which a person in Switzerland other than the issuer is required to withhold tax on any interest payments;

 

(4)                     any withholding or deduction imposed on any payment by reason of FATCA; or

 

(5)                     any combination of two or more items (1) through (4) above.

 

“Relevant Date” as used herein means whichever is the later of (x) the date on which such payment first becomes due and (y) if the full amount payable has not been received by the Trustee on or prior to such date, the date on which the full amount having been so received, notice to that effect shall have been given to the Holder of this Note.

 

Whenever in this Note there is mentioned, in any context, the payment of the principal of or any premium, interest or any other amounts on, or in respect of, this Note, such mention shall be deemed to include mention of the payment of additional amounts as provided above to the extent that, in such context, additional amounts are, were or would be payable in respect thereof pursuant to the terms hereof, and express mention of the payment of additional amounts in any provision hereof shall not be construed as excluding the payment of additional amounts in those provisions hereof where such express mention is not made.

 

5

 

Further Issues

 

The Company may from time to time, acting through the New York Branch and without notice to or the consent of the Holder of this Note, create and issue further Notes having the same terms as this Note and ranking pari passu with this Note in all respects (or having the same terms in all respects except for the payment of interest accruing prior to the issue date of such further Notes or except for the first payment of interest following the issue date of such further Notes or the initial interest accrual date thereof).  Such further Notes will be consolidated and form a series of Securities with this Note and will, except as aforesaid, have the same terms as to status, redemption or otherwise as this Note, and payments on such further Notes in liquidation will be made pro rata.

 

6

 

Credit Suisse AG, a corporation established under the laws of, and duly licensed as a bank in, Switzerland (together with its successors and assigns, the “Company”), acting through its New York Branch, for value received, hereby promises to pay to Cede & Co. or registered assignees, the Principal Amount as specified on the face hereof (or in the pricing supplement attached hereto or delivered herewith or as shall be set forth in the Schedule of Exchanges of Senior Medium-Term Notes (Fixed Rate) attached hereto) on the Maturity Date specified on the face hereof (or in the pricing supplement attached hereto or delivered herewith) (except to the extent redeemed or repaid prior to the Maturity Date) and to pay interest thereon from the Original Issue Date specified on the face hereof (or in the pricing supplement attached hereto or delivered herewith) at the Interest Rate per annum specified on the face hereof (or in the pricing supplement attached hereto or delivered herewith) until the Principal hereof is paid or duly made available for payment (except as provided below).  The Company will pay interest in arrears on Interest Payment Date(s) specified on the face hereof (or in the pricing supplement attached hereto or delivered herewith) commencing with the first Interest Payment Date next succeeding the Original Issue Date specified on the face hereof (or in the pricing supplement attached hereto or delivered herewith), and on the Maturity Date (or any Redemption Date or Repayment Date) (these and certain other capitalized terms used herein are defined on the reverse of this Note); provided, however, that if the Original Issue Date occurs between a Record Date, as defined below, and the next succeeding Interest Payment Date, interest payments will commence on the second Interest Payment Date succeeding the Original Issue Date and will be payable to the registered holder of this Note (the “Holder” and, collectively, the “Holders”) on the Record Date with respect to such second Interest Payment Date; and provided, further, that if an Interest Payment Date or the Maturity Date (or any Redemption Date or Repayment Date) would fall on a day that is not a Business Day, payment of interest, premium, if any, or Principal otherwise payable on such date shall not be made on such date, but shall be made on the next succeeding Business Day with the same force and effect as if made on the Interest Payment Date or on the Maturity Date (or any Redemption Date or Repayment Date), and no interest shall accrue for the period from and after the Interest Payment Date or the Maturity Date (or any Redemption Date or Repayment Date) to such next succeeding Business Day.

 

Payment of the Principal of this Note, any premium and the interest due on the Maturity Date (or any Redemption Date or Repayment Date) will be made in immediately available funds upon surrender of this Note at the office or agency of such paying agent as the Company may determine and maintained for that purpose in the Borough of Manhattan, The City of New York (a “Paying Agent”), or at the office or agency of such other Paying Agent as the Company may determine.

 

Notwithstanding the foregoing, if an Addendum is attached hereto or “Other Provisions” apply to this Note as specified on the face hereof (or in the pricing supplement attached hereto or delivered herewith), this Note shall be subject to the terms set forth in such Addendum or such “Other Provisions.”

 

Interest on this Note will accrue from the most recent Interest Payment Date to which interest has been paid or duly provided for or, if no interest has been paid or duly provided for, from the Original Issue Date, until the Principal hereof has been paid or duly made available for payment (except as provided herein).  The interest so payable, and punctually paid or duly provided for, on any Interest Payment Date, will, subject to certain exceptions described herein,

 

7

 

be paid to the person in whose name this Note (or one or more predecessor Notes) is registered at the close of business on the corresponding record date (the “Record Date”), which for this tranche of the Notes shall be, for so long as the Notes of this tranche are in the form of one or more Registered Global Securities, three Business Days prior to the relevant Interest Payment Date and, in the event that any Notes of this tranche are not represented by one or more Registered Global Securities, the fifteenth day (whether or not a Business Day) prior to the relevant Interest Payment Date; provided, however, that interest payable on the Maturity Date (or any Redemption Date or Repayment Date) will be payable to the person to whom the Principal hereof shall be payable.

 

If the Specified Currency specified on the face hereof (or in the pricing supplement attached hereto or delivered herewith) is other than U.S. dollars, any payment on this Note on an Interest Payment Date or the Maturity Date (or any Redemption Date or Repayment Date) will be made in U.S. dollars, as provided below, unless the Holder hereof elects by written request (which request shall also include appropriate wire transfer instructions) to the Paying Agent at its corporate trust office in The City of New York received on or prior to the Record Date relating to an Interest Payment Date or at least 10 days prior to the Maturity Date (or any Redemption Date or Repayment Date), as the case may be, to receive such payment in such Specified Currency except as provided on the reverse hereof; provided, that any U.S. dollar amount to be received by a Holder of this Note will be based on the highest bid quotation in The City of New York received by the Exchange Rate Agent appointed by the Company and specified on the face hereof (or in the pricing supplement attached hereto or delivered herewith) (the “Exchange Rate Agent”), at approximately 11:00 a.m., New York City time, on the second Business Day preceding the applicable payment date from three recognized foreign exchange dealers (one of which may be the Exchange Rate Agent) for the purchase by the quoting dealer of such Specified Currency for U.S. dollars for settlement on such payment date in the aggregate amount of such Specified Currency payable to all Holders of Notes having the same terms as this Note (including Original Issue Date) scheduled to receive U.S. dollar payment and at which the applicable dealer commits to execute a contract; provided, further, that if such bid quotations are not available, such payments shall be made in such Specified Currency.  All currency exchange costs will be borne by the Holder of this Note by deductions from such payments.  The Holder hereof may elect to receive payment in such Specified Currency for all such payments and need not file a separate election for each such payment, and such election shall remain in effect until revoked by written notice to the Paying Agent at its corporate trust office in The City of New York received on a date prior to the Record Date for the relevant Interest Payment Date or at least 10 calendar days prior to the Maturity Date (or any Redemption Date or Repayment Date), as the case may be; provided, that such election is irrevocable as to the next succeeding payment to which it relates; if such election is made as to full payment on this Note, such election may thereafter be revoked so long as the Paying Agent is notified of the revocation within the time period set forth above.

 

If the Specified Currency specified on the face hereof (or in the pricing supplement attached hereto or delivered herewith) is U.S. dollars, payment of the Principal of and premium, if any, and interest on this Note will be made in such coin or currency of the United States as at the time of payment is legal tender for payment of public and private debts; provided, however, that payments of interest, other than interest due at maturity (or any

 

8

 

Redemption Date or Repayment Date) will be made by U.S. dollar check mailed to the address of the person entitled thereto as such address shall appear in the Note register.

 

A Holder of U.S. $5,000,000 (or, if the Specified Currency specified on the face hereof (or in the pricing supplement attached hereto or delivered herewith) is other than U.S. dollars, the equivalent thereof in the Specified Currency) or more in aggregate principal amount of Notes having the same Interest Payment Date will be entitled to receive payments of interest, other than interest due at maturity (or any Redemption Date or Repayment Date), by wire transfer of immediately available funds to an account within the United States maintained by the Holder of this Note if appropriate wire transfer instructions in writing have been received by the Paying Agent not less than 10 days prior to the applicable Interest Payment Date; provided, however, that, unless alternative arrangements are made, any such payments to be made in a Specified Currency other than U.S. dollars shall be made to an account at a bank outside the United States.

 

Reference is hereby made to the further provisions of this Note set forth on the reverse hereof, which further provisions shall for all purposes have the same effect as if set forth at this place.

 

Unless the certificate of authentication hereon has been executed by the Trustee, as defined on the reverse hereof, by manual signature, this Note shall not be entitled to any benefit under the Indenture, as defined on the reverse hereof, or be valid or obligatory for any purpose.

 

9

 

IN WITNESS WHEREOF, the Company, acting through its New York Branch has caused this Note to be duly executed.

 

	
 
    	
CREDIT SUISSE AG,   acting through its
    
	
 
    	
New York Branch
    
	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
 
    	
Name:
    
	
 
    	
 
    	
Title:
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
 
    	
Name:
    
	
 
    	
 
    	
Title:
    

 

CERTIFICATE OF AUTHENTICATION

 

This is one of the Securities of the series designated therein referred to in the within-mentioned Indenture.

 

Dated: November 12, 2019

 

	
 
    	
THE BANK OF NEW YORK   MELLON,
    
	
 
    	
as Trustee
    
	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
 
    	
Authorized Signatory
    

 

10

 

[REVERSE OF NOTE]

 

CREDIT SUISSE AG, acting through its
 New York Branch
 SENIOR MEDIUM-TERM NOTE

(FIXED RATE)

 

This Note is one of a duly authorized issue of Senior Medium-Term Notes (the “Notes”) of the Company, acting through its New York Branch.  The Notes are issuable under a senior indenture, dated as of March 29, 2007, as supplemented by a second supplemental indenture, dated as of March 25, 2009 (collectively, the “Indenture”), in each case between the Company and The Bank of New York Mellon (formerly known as The Bank of New York), as trustee (the “Trustee”), to which Indenture and all indentures supplemental thereto reference is hereby made for a statement of the respective rights, limitations of rights, duties and immunities of the Company, the Trustee and Holders of the Notes and the terms upon which the Notes are to be authenticated and delivered.  The Bank of New York Mellon (formerly known as The Bank of New York) at its corporate trust office in The City of New York has been appointed the Registrar and Paying Agent with respect to the Notes.  The terms of individual Notes may vary with respect to interest rates, interest rate formulas, issue dates, maturity dates, or otherwise, all as provided in the Indenture.  To the extent not inconsistent herewith, the terms of the Indenture are hereby incorporated by reference herein.  This Note will not be subject to any sinking fund and, unless otherwise provided on the face hereof (or in the pricing supplement attached hereto or delivered herewith) in accordance with the provisions of the following two paragraphs, will not be redeemable or subject to repayment at the option of the Holder prior to maturity.

 

Interest payments on this Note will equal the amount of interest accrued from and including the immediately preceding Interest Payment Date in respect of which interest has been paid or duly made available for payment with respect to this Note (or from and including the Original Issue Date, if no interest has been paid or made available for payment with respect to this Note) to but excluding the next succeeding Interest Payment Date or Maturity Date (or earlier Redemption Date or Repayment Date, if any), as the case may be.  Interest payments for this Note will be computed and paid on the basis of a 360-day year of twelve 30-day months.

 

This Note shall be subject to redemption at the option of the Company on any date on or after the Initial Redemption Date, if any, specified on the face hereof (or in the pricing supplement attached hereto or delivered herewith), in whole or from time to time in part in increments of U.S. $250,000 and integral multiples of U.S. $1,000 in excess thereof or the minimum Authorized Denomination (provided that any remaining principal amount hereof shall be at least U.S. $250,000 or such minimum Authorized Denomination), at the Redemption Price (as defined below), together with unpaid interest accrued thereon to the date fixed for redemption (each, a “Redemption Date”), on notice given no more than 60 nor less than 30 calendar days prior to the Redemption Date and in accordance with the provisions of the Indenture.  The “Redemption Price” shall initially be the Initial Redemption Percentage specified on the face hereof (or in the pricing supplement attached hereto or delivered herewith) multiplied by the unpaid principal amount of this Note to be redeemed.  The Initial Redemption Percentage shall decline at each anniversary of the Initial Redemption Date by the Annual Redemption Percentage Reduction, if any, specified on the face hereof (or in the pricing supplement attached

 

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hereto or delivered herewith) until the Redemption Price is 100% of unpaid principal amount to be redeemed.  In the event of redemption of this Note in part only, a new Note of like tenor for the unredeemed portion hereof and otherwise having the same terms as this Note shall be issued in the name of the Holder hereof upon the presentation and surrender hereof.

 

This Note shall be subject to repayment by the Company at the option of the Holder hereof on the Optional Repayment Date(s), if any, specified on the face hereof (or in the pricing supplement attached hereto or delivered herewith), in whole or in part in increments of U.S. $250,000 and integral multiples of U.S. $1,000 in excess thereof or the minimum Authorized Denomination (provided that any remaining principal amount hereof shall be at least U.S. $250,000 or such minimum Authorized Denomination), at a repayment price equal to 100% of the unpaid principal amount to be repaid, together with unpaid interest accrued thereon to the date fixed for repayment (each, a “Repayment Date”).  For this Note to be repaid, this Note must be received, together with the form hereon entitled “Option to Elect Repayment” duly completed, by the Trustee at its corporate trust office not more than 60 nor less than 30 calendar days prior to the Repayment Date.  Exercise of such repayment option by the Holder hereof will be irrevocable.  In the event of repayment of this Note in part only, a new Note of like tenor for the unrepaid portion hereof and otherwise having the same terms as this Note shall be issued in the name of the Holder hereof upon the presentation and surrender hereof.

 

If this Note is specified on the face hereof (or in the pricing supplement attached hereto or delivered herewith) as an Original Issue Discount Note, the amount payable to the Holder of this Note in the event of redemption, repayment or acceleration of maturity will be equal to the sum of (i) the Issue Price specified on the face hereof (or in the pricing supplement attached hereto or delivered herewith) (increased by any accruals of the Discount, as defined below) and, in the event of any redemption of this Note (if applicable), multiplied by the Initial Redemption Percentage (as adjusted by the Annual Redemption Percentage Reduction, if applicable) and (ii) any unpaid interest on this Note accrued from the Original Issue Date to the Redemption Date, Repayment Date or date of acceleration of maturity, as the case may be.  The difference between the Issue Price and 100% of the principal amount of this Note is referred to herein as the “Discount.”

 

For purposes of determining the amount of Discount that has accrued as of any Redemption Date, Repayment Date or date of acceleration of maturity of this Note, such Discount will be accrued so as to cause the yield on the Note to be constant (computed using the “Constant Yield” method in accordance with the rules under the Code).  The constant yield will be calculated using a 30-day month, 360-day year convention, a compounding period that, except for the Initial Period (as defined below), corresponds to the shortest period between Interest Payment Dates (with ratable accruals within a compounding period) and an assumption that the maturity of this Note will not be accelerated.  If the period from the Original Issue Date to the initial Interest Payment Date (the “Initial Period”) is shorter than the compounding period for this Note, a proportionate amount of the yield for an entire compounding period will be accrued.  If the Initial Period is longer than the compounding period, then such period will be divided into a regular compounding period and a short period, with the short period being treated as provided in the preceding sentence.

 

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If this Note is specified on the face hereof (or in the pricing supplement attached hereto or delivered herewith) as an Indexed Note, the return on this Note will be linked to the performance of one or more underlyings or a basket of such underlyings. The Company will refer generally to each index, exchange-traded fund, equity security of an issuer, exchange rate, commodity, commodity futures contract or any other market measure or reference asset as an “underlying.”

 

If this Note is specified on the face hereof (or in the pricing supplement attached hereto or delivered herewith) as a Dual Currency Note, the Company may have a one time option, exercisable on the Option Election Date specified on the face hereof (or in the pricing supplement attached hereto or delivered herewith), in whole, but not in part, with respect to all Dual Currency Notes issued on the same day and having the same terms, of making all payments of Principal, premium, if any, and interest after the exercise of such option, whether at maturity or otherwise (which payment would otherwise be made in the Specified Currency of such Notes), in an optional currency (the “Optional Payment Currency”) specified on the face hereof (or in the pricing supplement attached hereto or delivered herewith).

 

If this Note is specified on the face hereof (or in the pricing supplement attached hereto or delivered herewith) as an Amortizing Note, the Company will make payments combining Principal and interest in installments over the life of such Note.  Payments with respect to Amortizing Notes will be applied first to the interest due and payable on the Notes and then to the reduction of the unpaid Principal of the Notes.

 

If this Note is specified on the face hereof (or in the pricing supplement attached hereto or delivered herewith) as a Renewable Note, this Note will mature on an Interest Payment Date set forth on the face hereof (or in the applicable pricing supplement attached hereto or delivered herewith), unless the maturity of all or a portion of the Principal amount of this Note is extended in accordance with the procedures set forth in the applicable pricing supplement.

 

If so specified on the face hereof (or in the pricing supplement attached hereto or delivered herewith), the Maturity Date of this Note may be extended at the option of the Company for one or more periods up to but not beyond the date (the “Final Maturity Date”) set forth on the face hereof (or in the pricing supplement attached hereto or delivered herewith).

 

This Note is unsecured and ranks pari passu with all other unsecured and unsubordinated indebtedness of the Company.

 

This Note, and any Note or Notes issued upon transfer or exchange hereof, is issuable only in fully registered form, without coupons, and, if denominated in U.S. dollars, is issuable only in denominations of U.S. $250,000 or any integral multiple of U.S. $1,000 in excess thereof, provided that if a different Authorized Denomination is specified on the face hereof (or in the pricing supplement attached hereto or delivered herewith), this Note shall be issuable only in such Authorized Denomination.  If this Note is denominated in a Specified Currency other than U.S. dollars, then, unless a higher minimum denomination is required by applicable law, it is issuable only in the minimum Authorized Denomination specified on the face hereof (or in the pricing supplement attached hereto or delivered herewith) or any amount in excess thereof which is an integral multiple thereof.

 

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In case an Event of Default (as defined in the Indenture) with respect to the Notes shall have occurred and be continuing, the Principal hereof and the interest accrued hereon, if any, may be declared, and upon such declaration shall become, due and payable, in the manner, with the effect and subject to the conditions provided in the Indenture.

 

The Indenture contains provisions that provide that the Company and the Trustee may amend or supplement the Indenture or the Notes without notice to or the consent of any Holder in order to (i) cure any ambiguity, defect or inconsistency in the Indenture, provided that such amendments or supplements shall not materially and adversely affect the interests of the Holders; (ii) comply with the requirements of the Indenture if the Company consolidates with, merges with or into, or sells, conveys, transfers, leases or otherwise disposes of all or substantially all its property and assets (as an entirety or substantially as an entirety in one transaction or a series of transactions), to any person; (iii) comply with any requirements of the Securities and Exchange Commission in connection with the qualification of the Indenture under the Trust Indenture Act; (iv) evidence and provide for the acceptance of appointment under the Indenture with respect to the Notes by a successor Trustee; (v) provide for uncertificated or unregistered Notes and to make all appropriate changes for such purpose; (vi) provide for a guarantee from a third party on outstanding Notes that are issued under the Indenture; (vii) provide for the substitution of one or more of the Company’s branches as obligor of the Notes; or (viii) make any change that does not materially and adversely affect the rights of any Holder.

 

The Indenture contains provisions that provide that, without prior notice to any Holders, the Company and the Trustee may amend the Indenture and the Notes with the written consent of the Holders of a majority in principal amount of the outstanding Securities of all series affected by such amendment (all such series voting as one class), and the Holders of a majority in principal amount of the outstanding Securities of all series affected thereby (all such series voting as one class) by written notice to the Trustee may waive future compliance by the Company with any provision of the Indenture or the Notes; provided that, without the consent of each Holder of the Securities affected thereby, an amendment or waiver, including a waiver of past defaults, may not: (i) extend the stated maturity of the Principal of, or any sinking fund obligation or any installment of interest on, such Holder’s Note, or reduce the Principal thereof or the rate of interest thereon (including any amount in respect of original issue discount), or adversely affect the rights of such Holder under any mandatory redemption or repurchase provision or any right of redemption or repurchase at the option of such Holder, or reduce the amount of the Principal of an Original Issue Discount Note that would be due and payable upon an acceleration of the maturity thereof or the amount thereof provable in bankruptcy, insolvency or similar proceeding, or change any place of payment where, or the currency in which, any Principal or the interest thereon is payable, modify any right to convert or exchange such Holder’s Note for another security to the detriment of the Holder or impair the right to institute suit for the enforcement of any such payment on or after the due date therefor; (ii) reduce the percentage in principal amount of outstanding Notes the consent of whose Holders is required for any such supplemental indenture, or for any waiver of compliance with certain provisions of the Indenture or certain Defaults and their consequences provided for in the Indenture; (iii) waive a Default in the payment of Principal of or interest on any Note of such Holder; or (iv) modify any of the provisions of the Indenture governing amendments or waivers with the consent of Holders except to increase any such percentage or to provide that certain other provisions of the

 

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Indenture cannot be modified or waived without the consent of the Holder of each outstanding Security affected thereby.

 

It is also provided in the Indenture that, subject to certain conditions, the Holders of at least a majority in principal amount of the outstanding Securities of all series affected (voting as a single class), by notice to the Trustee, may waive an existing Default or Event of Default with respect to the Securities of such series and its consequences, except a Default in the payment of Principal of or interest on any Security or in respect of a covenant or provision of the Indenture which cannot be modified or amended without the consent of the Holder of each outstanding Security affected.  Upon any such waiver, such Default shall cease to exist, and any Event of Default with respect to the Securities of such series arising therefrom shall be deemed to have been cured, for every purpose of the Indenture; but no such waiver shall extend to any subsequent or other Default or Event of Default or impair any right consequent thereto.

 

The Indenture provides that a series of Securities may include one or more tranches (each a “tranche”) of Securities, including Securities issued in a Periodic Offering.  The Securities of different tranches may have one or more different terms, but all the Securities of each tranche within a series shall have identical terms, provided that Securities of each tranche within a series may have different authentication dates, public offering prices, initial interest accrual dates, and initial interest payment dates, if applicable.  Notwithstanding any other provision of the Indenture, subject to certain exceptions, with respect to sections of the Indenture concerning the execution, authentication and terms of the Securities, redemption of the Securities, maintenance of an office or agency of the Company in The City of New York, Events of Default of the Securities, defeasance of the Securities and amendment of the Indenture, if any series of Securities includes more than one tranche, all provisions of such sections applicable to any series of Securities shall be deemed equally applicable to each tranche of any series of Securities in the same manner as though originally designated a series unless otherwise provided with respect to such series or tranche pursuant to a Board Resolution or a supplemental indenture establishing such series or the Authority establishing such tranche.

 

Except as set forth below, if the Principal of, or premium, if any, or interest on, this Note is payable in a Specified Currency other than U.S. dollars and such Specified Currency is not available to the Company for making payments thereof due to the imposition of exchange controls or other circumstances beyond the control of the Company or is no longer used by the government of the country issuing such currency or for the settlement of transactions by public institutions within the international banking community, then the Company will be entitled to satisfy its obligations to the Holder of this Note by making such payments in U.S. dollars on the basis of the Market Exchange Rate (as defined below) on the date of such payment or, if the Market Exchange Rate is not available on such date, as of the most recent practicable date.  Any payment made under such circumstances in U.S. dollars where the required payment is in a Specified Currency other than U.S. dollars will not constitute an Event of Default.

 

All determinations referred to above made by the Company or its agents shall be at its sole discretion and shall, in the absence of manifest error, be conclusive for all purposes and binding on Holders of Notes.  So long as this Note shall be outstanding, the Company will cause to be maintained an office or agency for the payment of the Principal of and premium, if any, and interest on this Note as herein provided in the Borough of Manhattan, The City of New

 

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York, and an office or agency in said Borough of Manhattan for the registration, transfer and exchange as aforesaid of the Notes.  The Company may designate other agencies for the payment of said Principal, premium, if any, and interest at such place or places (subject to applicable laws and regulations) as the Company may decide.  So long as there shall be any such agency, the Company shall keep the Trustee advised of the names and locations of such agencies, if any are so designated.

 

No provision of this Note or of the Indenture shall alter or impair the obligation of the Company, which is absolute and unconditional, to pay the Principal of, premium, if any, and interest on this Note at the time, place, and rate, and in the coin or currency, herein and in the Indenture prescribed unless otherwise agreed between the Company and the registered Holder of this Note.

 

Upon due presentment for registration of transfer of this Note, a new Note or Notes of authorized denominations for an equal aggregate principal amount will be issued to the transferee in exchange therefor, subject to the limitations provided in the Indenture, without charge except for any tax or other governmental charge imposed in connection therewith.

 

The Company or any agent of the Company, the registrar of the Notes or the Trustee may treat the Holder in whose name this Note is registered as the owner hereof for all purposes, whether or not this Note is overdue, and neither the Company, the Registrar, the Trustee nor any such agent shall be affected by notice to the contrary.

 

No recourse shall be had for the payment of the Principal of, or premium, if any, or the interest on, this Note, for any claim based hereon, or otherwise in respect hereof, or based on or in respect of the Indenture or any indenture supplemental thereto, against any incorporator, shareholder, officer or director, as such, past, present or future, of the Company or of any successor corporation, either directly or through the Company or any successor corporation, whether by virtue of any constitution, statute or rule of law or by the enforcement of any assessment or penalty or otherwise, all such liability being, by the acceptance hereof and as part of the consideration for the issue hereof, expressly waived and released.

 

This Note shall for all purposes be governed by, and construed in accordance with, the laws of the State of New York (without regard to conflicts of law principles thereof).

 

As used herein:

 

(i)            the term “Business Day” means any day that is not a Saturday or Sunday and that is not a day on which banking institutions are generally authorized or obligated by law, regulation or executive order to close in The City of New York or any other place of payment with respect to the applicable Notes and (i) with respect to Notes denominated in a Specified Currency other than U.S. dollars or euro, “Business Day” shall not include a day on which banking institutions are generally authorized or obligated by law, regulation or executive order to close in the principal financial center of the country of the Specified Currency, or (ii) with respect to Notes denominated in euros, “Business Day” shall also include any day on which the TransEuropean Automated Real-Time Gross Settlement Express Transfer (TARGET2) System is in place;

 

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(ii)           the term “Market Exchange Rate” shall mean, as of any date, for any currency or currency unit, the noon U.S. dollar buying rate for that currency or currency unit, as the case may be, for cable transfers quoted in The City of New York on such date as certified for customs purposes by the Federal Reserve Bank of New York;

 

(iii)          the term “United States” means the United States of America (including the States and the District of Columbia), its territories, its possessions and other areas subject to its jurisdiction; and

 

(iv)          all other terms used in this Note which are defined in the Indenture and not otherwise defined herein shall have the meanings assigned to them in the Indenture.

 

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ABBREVIATIONS

 

The following abbreviations, when used in the inscription on the face of this instrument, shall be construed as though they were written out in full according to applicable laws or regulations:

 

TEN COM — as tenants in common

 

TEN ENT — as tenants by the entireties

 

JT TEN — as joint tenants with right of survivorship and not as tenants in common

 

UNIF GIFT MIN ACT —        (Custodian)        (Minor)

 

Under Uniform Gifts to Minors Act             (State)

 

Additional abbreviations may also be used though not in the above list.

 

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FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and transfer(s) unto

 

	
[PLEASE INSERT SOCIAL SECURITY OR OTHER IDENTIFYING   NUMBER OF ASSIGNEE]
    
	
 
    
	
 
    
	
 
    
	
 
    
	
[PLEASE PRINT OR TYPE NAME AND   ADDRESS, INCLUDING ZIP CODE, OF ASSIGNEE]
    
	
 
    
	
 
    
	
the within Note and all rights thereunder, hereby   irrevocably constituting and appointing
    
	
 
    
	
 
    	
attorney to
    
	
transfer such Note on the books of the Company, with   full power of substitution in the premises.
    

 

	
 
    	
 
    	
Signature:
    
	
 
    	
 
    	
 
    
	
Dated:
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
NOTICE: The signature   to this assignment must correspond with the name as written upon the face of   the within Note in every particular without alteration or enlargement or any   change whatsoever.
    

 

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OPTION TO ELECT REPAYMENT

 

The undersigned hereby irrevocably request(s) the Company to repay $            principal amount of the within Note, pursuant to its terms, on the Optional Repayment Date first occurring after the date of receipt of the within Note as specified below, together with interest thereon accrued to the date of repayment, to the undersigned, at

	
 
    
	
 
    
	
 
    
	
 
    
	
(Please print or   typewrite name and address of the undersigned)
    

 

and to issue to the undersigned, pursuant to the terms of the Indenture, a new Note or Notes representing the remaining principal amount of this Note.

 

For this Option to Elect Repayment to be effective, this Note with the Option to Elect Repayment duly completed must be received by the Company within the relevant time period set forth above at its office or agency in the Borough of Manhattan, the City and State of New York, located initially at the office of the Trustee, 101 Barclay Street, Floor 7W, New York, New York  10286, Attention: Corporate Finance.

 

	
 
    	
Signature:
    
	
 
    	
 
    
	
Dated:
    	
 
    	
 
    	
 
    
	
 
    	
NOTICE: The signature   on this Option to Elect Repayment must correspond with the name as written   upon the face of the within instrument in every particular without alteration   or enlargement.
    
				

 

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SCHEDULE OF EXCHANGES OF SENIOR MEDIUM-TERM NOTES

 

(FIXED RATE)

 

The following exchanges of a part of this Registered Global Security have been made:

 

	
Date of Exchange
    	
 
    	
Amount of
   Decrease in
   Principal Amount
   of this Registered 
   Global Security
    	
 
    	
Amount of
   Increase in
   Principal Amount
   of this Registered 
   Global Security
    	
 
    	
Principal Amount
   of this Registered 
   Global Security
   Following Such
   Decrease (or
   Increase)
    	
 
    	
Signature of
   Authorized Officer
   of Trustee

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