EXHIBIT 10.7

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DEVELOPMENT AND LICENSE AGREEMENT

THIS LICENSE AGREEMENT (the “Agreement”) is made and is effective as of this 7th
day of October, 2013 (the “Effective Date”) by and between

Cadila Healthcare Limited, a corporation organized and existing under the laws
of India, whose principal place of business is at Zydus Tower, Satellite Cross
Roads, Ahmedabad - 380 015, India (“Zydus”),

and

Pieris AG, a corporation organized and existing under the laws of Germany, whose
principal place of business is at Lise-Meitner-Straße 30, 85354 Freising,
Germany (“Pieris”).

Pieris and Zydus are sometimes referred to herein individually as a “Party” and
collectively as the “Parties”.

RECITALS

 

A. Pieris is engaged in the research and development of biopharmaceutical
products and has developed a novel technology to develop Anticalin® proteins and
proprietary know-how and data relating thereto;

 

B. Zydus is engaged in the research, development, manufacture and marketing of
pharmaceutical and biopharmaceutical products, including but not limited to
therapeutic proteins, monoclonal antibodies and vaccines.

 

C. Pieris and Zydus desire to grant each other certain exclusive license rights
in the further research and development, clinical development and marketing &
commercialization of the Products (hereinafter defined), subject to and in
accordance with the terms in this Agreement.

NOW, THEREFORE, in consideration of the foregoing premises and the mutual
covenants herein contained, the Parties hereby agree as follows:

ARTICLE 1

DEFINITIONS

As used throughout this Agreement, the singular includes the plural and vice
versa, and words denoting any gender include all genders. Where the context so
admits or requires, references to Zydus or Pieris shall include their respective
employees, officers, directors or agents.

“AFFILIATE” means any Person that directly (or indirectly through one or more
intermediaries) controls, is controlled by, or is under common control with a
Party. For the purposes of this definition only, the terms “controls,”
“controlled,” and “control” mean: (i) the direct or indirect ability or power to
direct or cause the direction of the management and policies of an entity or
otherwise direct the affairs of such entity, whether through ownership of
equity, voting securities or beneficial interest, by contract, or otherwise: or
(ii) the ownership, directly or indirectly, of more than fifty percent (50%) of
the voting securities (or other comparable ownership interest for an entity
other than a corporation) of a Party.

“API” or “ACTIVE PHARMACEUTICAL INGREDIENT” means the active pharmaceutical
ingredient of a Drug Product in bulk form such as a Drug Substance, which, if
appropriately formulated and finished, would constitute the Drug Product. For
avoidance of doubt, API for Product 1 is the c-Met Anticalin, (herein referred
to as PRS-110) and API for Product 2 shall be determined by the CC pursuant to
Section 3(3).

 

Portions of the exhibit, indicated by the mark “[***],” were omitted and have
been filed separately with the Securities and Exchange Commission pursuant to
the Registrant’s application requesting confidential treatment pursuant to Rule
24b-2 of the Securities Exchange Act of 1934, as amended.

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“APPLICABLE LAWS” means all applicable statutes, ordinances, regulations,
judicial decisions, rules or orders of any kind whatsoever of any Governmental
Authority, including, without limitation, the Regulatory Laws, all as amended
from time to time.

“AUTHORIZED PERSONS” means Recipient’s directors, officers, employees and
professional advisors and consultants who are legally bound to keep confidential
any of the Confidential Information disclosed by the Discloser on terms at least
as onerous as those set out herein.

“[***]” means [***] (for the sake of clarity, [*** ]among other information).

“CALENDAR MONTH” means each successive period of 30/31 (or 28/29) days (as
applicable) commencing on 1st day of every month and ending on the last day of
that month.

“CALENDAR YEAR” means each successive period of twelve (12) months commencing on
January 1 and ending on December 31.

“CMC” means chemistry, manufacturing and control.

“COMMERCIALIZATION” means all activities before and after a Marketing Approval
for a Product or otherwise relating specifically to the marketing, sale and/or
distribution of Product including, without limitation: (i) sales force
detailing, advertising, education, planning, marketing, sales force training and
distribution; (ii) scientific and medical affairs; (iii) the manufacture of
Product intended for commercial sale, including, without limitation,
formulation, bulk API and/or Drug Product production, fill/finish, distribution,
manufacturing process improvement and quality assurance technical support.

“COMMERCIALLY REASONABLE EFFORTS” means that level of effort and application of
expertise and resource, typical in the pharmaceutical industry in the research,
development and commercialization of a product or compound owned by a Third
Party or resulting from a Party’s own research efforts, that is of similar
market potential and at a similar stage in its development or product life,
taking into account issues of safety and efficacy, product profile, difficulty
in developing a Product, competitiveness of the marketplace for resulting
products, the patent position of the compound or product, the regulatory
structure involved, the potential total profitability of the applicable products
marketed or to be marketed, and other relevant factors affecting the cost, risk
and timing of development and the total potential reward (profit) to be obtained
if a product is commercialized.

“CONFIDENTIAL INFORMATION” means the Pieris Confidential Information or the
Zydus Confidential Information, as applicable.

“CONTROL” or “CONTROLLED” means with respect to any intellectual property right,
that the applicable Party owns or has a license to such intellectual property
right and has the ability to grant access, a license, or a sublicense to such
intellectual property right to the other Party as provided for in this Agreement
without violating an agreement with a Third Party as of the time such Party
would be first required under this Agreement to grant the other Party such
access, license or sublicense; provided, however, that for rights acquired from
Third Parties after the Effective Date, such intellectual property right shall
be deemed to be “CONTROLLED” only if such access can be granted without
additional cost.

 

Portions of the exhibit, indicated by the mark “[***],” were omitted and have
been filed separately with the Securities and Exchange Commission pursuant to
the Registrant’s application requesting confidential treatment pursuant to Rule
24b-2 of the Securities Exchange Act of 1934, as amended.

 

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“CO-ORDINATION COMMITTEE” or “CC” means the committee of representatives from
each Party established to co-ordinate the Pieris Activities and Zydus
Activities, as further detailed in Section 3(3).

“DISCLOSER” means the Party disclosing its Confidential Information to the other
Party or to the other Party’s Authorized Persons pursuant to this Agreement.

“DISPUTE” means any dispute arising from or relating to this Agreement,
including, without limitation, the interpretation of any term of this Agreement
and/or the assessment of a Party’s compliance with any of its obligations under
this Agreement.

“DEVELOPMENT” means all activities undertaken under any Plan with respect to the
clinical development of a Product that are reasonably required to obtain one or
more Marketing Approvals of Product, including, without limitation:
(i) pre-clinical studies (including, without limitation, pharmacology,
toxicology and pharmacokinetics); (ii) regulatory affairs, project management,
clinical operations, medical writing, bio-statistics, data management and drug
safety, and clinical trials (including without limitation Bridging Studies) in
accordance with the current Good Laboratory Practices (cGLPs), current Good
Clinical Practices (cGCPs) and current Good Manufacturing Practices (cGMPs) or
other designated quality standards and Applicable Laws; (iii) all activities
relating to developing the ability to manufacture such Product, including,
without limitation, formulation, stability/analytical, packaging, delivery
technologies and devices, bulk API and/or Drug Product production, manufacturing
fill/finish, manufacturing process development, and quality assurance technical
support, clinical supplies distribution and QC (quality-control) testing and
release, until such time as manufacturing of such Product intended for
commercial sale commences; and (iv) any required post-Marketing Approval
commitments.

“DRUG PRODUCT” or “DP” means the final dosage form which contains a Product in
association with other active or inactive ingredients.

“DRUG SUBSTANCE” or “DS” means any substance or mixture of substances,
comprising a Product, intended to be used in the manufacture of a Drug Product
and that, when used in the production of the Drug Product, becomes the Active
Pharmaceutical Ingredient of the Drug Product. Such substances are intended to
furnish pharmacological activity or other direct effect in the diagnosis, cure,
mitigation, treatment, or prevention of disease or to affect the structure and
function of the body.

“DCGI” means the Drug Controller General of India, or any successor federal
agency having responsibility over India Marketing Approvals.

“EMA” means the European Medicines Agency, or any successor federal agency
having responsibility over Europe Union (EU) Marketing Approvals.

“FDA” means the United States (U.S.) Food and Drug Administration, or any
successor federal agency having responsibility over U.S. Marketing Approvals.

“FIELD” means (i) with respect to Product 1 (PRS-110), [***] provided, however,
[***] and (ii) with respect to Product 2, [***] to be agreed upon in good faith
upon the nomination of Product 2 pursuant to Section 3(3).

“GOVERNMENTAL AUTHORITY” means any court tribunal, arbitrator, agency,
commission, official or other instrumentality of any federal, state, or other
political subdivision, or supranational body, domestic or foreign.

“ICH” means the International Conference on Harmonization.

“ICH-GCP” means ICH / World Health Organization (WHO) Good Clinical Practice
standards.

“IMPROVEMENT” means any findings, developments, discoveries, inventions,
additions, modifications, enhancements, formulations, or changes to the
composition of matter, or method of use of Product, or its manufacture made by,
or coming under Control of either Party or Sublicensees during the Term which
are

 

Portions of the exhibit, indicated by the mark “[***],” were omitted and have
been filed separately with the Securities and Exchange Commission pursuant to
the Registrant’s application requesting confidential treatment pursuant to Rule
24b-2 of the Securities Exchange Act of 1934, as amended.

 

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necessary for the Research and Development of a Product and/or the manufacture
and Commercialization of the Product, including without limitation, new or
improved methods of synthesis, manufacture, ingredients, preparation,
presentation, means of delivery, dosage, formulation, or analysis, whether or
not patentable.

“IND Application” means an Investigational New Drug Application (together with
all additions, deletions, and supplements thereto) or the equivalent application
in a regulatory jurisdiction, filed with the Regulatory Authority in that
jurisdiction, the filing of which is necessary to commence and conduct human
clinical trials of a pharmaceutical product in that jurisdiction such as a
Clinical Trial Authorization Application in European Union (EU).

“INFORMATION” means any information controlled (including Controlled) by either
Party during the Term that is necessary for the Research and Development and/or
the manufacture and Commercialization. Information may include, but is not
limited to: (a) any and all inventions, know-how, developments, Improvements,
materials, data, analyses, and the like, regardless of whether the information
is stored or transmitted in oral, documentary, or electronic form; and
(b) information relating to research and development plans, experiments,
results, compounds, therapeutic leads, candidates and products, clinical and
preclinical data, trade secrets and manufacturing, marketing, financial,
regulatory, personnel and other business information and plans, and all
scientific, clinical, regulatory, marketing, financial and commercial
information or data; in each case, to the extent necessary for the Research and
Development and/or the manufacture and Commercialization.

“INVESTIGATIONAL MEDICAL PRODUCT” or “IMP” means a pharmaceutical form of a DP
or DS being tested in one or more clinical trials.

“JOINT ARISING IP” means all intellectual property, including Improvements and
any and all inventions, patents, copyrights and trademarks and other rights
relating thereto, that arises from the joint research and development conducted
by Zydus and Pieris, during the Term, under the Plans, as well as during the
term of the Prior MTA, and including without limitation, Joint Know-How and
Joint Patents, but explicitly excluding (i) Pieris Arising IP & Zydus Arising IP
and (ii) Pieris Confidential Information & Zydus Confidential Information and
(iii) Pieris Acquired IP & Zydus Acquired IP.

“JOINT KNOW-HOW” means all Information that is created by Zydus and Pieris
jointly, during the Term, under the Plans, but specifically excluding (i) Joint
Patents and (ii) the Information contained in Joint Patents.

“JOINT PATENTS” mean all Patents disclosing and/or claiming Joint Arising IP,
together with the Information contained therein, to be registered by the Parties
jointly in the Territory in such manner as stated in Article 10.

“LICENSE” shall have the meaning provided under Article 2.

“MARKETING APPROVAL” means the act of a Regulatory Authority necessary for the
Commercialization of a Product for one or more indications in a regulatory
jurisdiction in the Territories, including, without limitation, the approval of
an NDA by a Regulatory Authority and satisfaction of all applicable regulatory
and notification requirements.

“NDA” or “NEW DRUG APPLICATION” means an application or set of applications (and
any other required registrations, notifications, forms, amendments or
supplements) for a Marketing Approval for a Product and/or pre-market approval
to make and commercialize the Product, filed with a Regulatory Authority
including, without limitation, all documents, data and other information
concerning a pharmaceutical product which are necessary for gaining the
Marketing Approval.

 

Portions of the exhibit, indicated by the mark “[***],” were omitted and have
been filed separately with the Securities and Exchange Commission pursuant to
the Registrant’s application requesting confidential treatment pursuant to Rule
24b-2 of the Securities Exchange Act of 1934, as amended.

 

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“NET SALES” means, with respect to a Product, the gross amount (excluding VAT or
excise duty or similar taxes) invoiced by Zydus or Pieris or any of their
Affiliates or Sub-licensees to a Third Party that is not a Related Third Party,
in the Zydus Territory / Pieris Territory as the case may be, less:

 

  a) [***];

 

  b) [***];

 

  c) [***];

 

  d) [***];

 

  e) [***]; and

 

  f) [***].

Such amount shall be determined from the books and records of Zydus or Pieris or
their respective Sublicensees and Affiliates, as the case may be, maintained in
accordance with any then-current Internationally-recognized accounting standard
[***], in the case of Sublicensees or Affiliates, such similar accounting
principles, consistently applied.

“OUTLICENSE” and “OUTLICENSING” shall mean [***] pursuant to a Sub-license in
accordance with Article 2.

“PATENT” or “PATENTS” means in respect of a Product: (a) all patent applications
(including provisional applications and applications for certificates of
invention); (b) all patents issuing from such patent applications (including
certificates of invention); (c) all patents and patent applications based on,
corresponding to, or claiming priority from any of the foregoing; (d) all
reissues, substitutions, confirmations, registrations, validations,
re-examinations, additions, continuations, continued prosecution applications,
continuations-in-part, or divisions of or to any of the foregoing; and (e) all
term extensions, supplementary protection certificates and other governmental
action beyond the original patent expiration date.

“PERSON” means a natural person, a corporation, a partnership, a trust, a joint
venture, a limited liability company, any governmental authority or any other
entity or organization.

“PHASE I TRIAL” means a human clinical trial conducted in healthy volunteers or
patients anywhere in the world with a Product in accordance with ICH cGCP
guidelines intended to establish an initial safety profile and the
pharmacokinetics and/or pharmacodynamics of the Product. Phase I Trials shall
include any Phase Ia Trial and any Phase Ib (multiple ascending dose) Trial. In
case of Oncology drug development expansion trials of Phase I that can lead to a
Phase III approval or Marketing Approval will be considered.

“PHASE II TRIAL” means a human clinical trial conducted in patients anywhere in
the world with a Product in accordance with ICH cGCP guidelines and intended to
demonstrate efficacy and a level of safety of the Product in the particular
indication tested, as well as to determine the unit and/or daily dosage regimen
required for testing the Product in the following Phase III Trial. Phase II
Trials shall include any Phase IIa Trial and any Phase IIb Trial.

“PHASE III TRIAL” means a human clinical trial conducted in patients anywhere in
the world with a Product in accordance with ICH cGCP guidelines and intended to
demonstrate efficacy and a level of safety of the Product in the particular
indication tested sufficient to obtain the Marketing Approval of the Product
from a Regulatory Authority.

 

Portions of the exhibit, indicated by the mark “[***],” were omitted and have
been filed separately with the Securities and Exchange Commission pursuant to
the Registrant’s application requesting confidential treatment pursuant to Rule
24b-2 of the Securities Exchange Act of 1934, as amended.

 

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“PLAN” means a written plan for the Zydus Activities and Pieris Activities,
prepared and approved by the CC and implemented by Zydus and Pieris,
respectively, on an ongoing basis. A copy of the initial Plan for the Zydus
Activities and Pieris Activities is attached hereto as Schedule 3. Subsequent
Plan(s), e.g. for Additional Product(s), will be agreed between the Parties.

“PRODUCT(S)” means [***].

“PRODUCT 1” means an anti-c-Met Anticalin® protein, made using Pieris Technology
[***] (herein referred to as PRS-110); provided, however, that Product 1 shall
exclude (i) [***] (ii) any PRS-110 drug conjugate and (iii) Additional
Product(s) unless explicitly agreed by the Parties.

“ADDITIONAL PRODUCT” means any [***] named by mutual agreement between the
Parties after the Effective Date, including the Product 2 which will be named
between the Parties pursuant to Section 2(5)(c).

“PRODUCT LAUNCH” means [***].

“PIERIS ACQUIRED IP” means all Information, know-how, intellectual property,
including Improvements and any and all inventions, Patents, copyrights and
trademarks and other rights, in each case necessary to the Development and/or
Commercialization of a Product and over which Pieris acquires Control during the
Term.

“PIERIS ACTIVITIES” means the activities undertaken by Pieris under the Plans in
relation to (i) the Research, Development, manufacture and Commercialization of
a Product in the Pieris Territory pursuant to the terms of this Agreement and
(ii) its obligations in respect of the grant of the License and as stated in
Article 3 and Schedule 3 herein.

“PIERIS ARISING IP” means all intellectual property, including Improvements and
any Information, inventions and Patents relating thereto, [***], during the
Term, under the Plans, as well as during the term of the Prior MTA.

“PIERIS CONFIDENTIAL INFORMATION” means all Pieris Rights and all Information
disclosed or provided by, or on behalf of, Pieris to Zydus in connection with
this Agreement, whether by letter or by the use of an appropriate proprietary
stamp or legend. Notwithstanding the foregoing, Information which is orally or
visually disclosed, or is disclosed in writing without an appropriate letter,
proprietary stamp or legend, shall constitute Pieris Confidential Information if
Pieris, within [***] days after such disclosure, delivers to Zydus a written
document or documents describing such Confidential Information and referencing
the place and date of such oral, visual or written disclosure.

“PIERIS KNOW-HOW” means (i) all Information that Pieris Controls as of the
Effective Date relating to a Product and (ii) Pieris materials, in each case as
is necessary to enable Zydus to conduct the Zydus Activities or exercise/use the
License granted hereunder. Pieris Know-How does not include the Pieris Patents.

“PIERIS PATENTS” means all Patents Controlled by Pieris as of the Effective Date
that are necessary to enable Zydus to conduct the Zydus Activities or
exercise/use the License granted hereunder, together with the Information
contained therein.

“REVENUES” means [***]. Notwithstanding the foregoing, “Revenues” shall not
include any payments that constitute: (a) [***]; (b) [***]; (c) [***];
(d) [***]; and (e) [***].

“PIERIS RIGHTS” means Pieris Patents and Pieris Know-How.

 

Portions of the exhibit, indicated by the mark “[***],” were omitted and have
been filed separately with the Securities and Exchange Commission pursuant to
the Registrant’s application requesting confidential treatment pursuant to Rule
24b-2 of the Securities Exchange Act of 1934, as amended.

 

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“PIERIS TERRITORY” means [***].

“PRIOR CDA” means the Mutual Confidential Disclosure Agreement, made on [***],
by and between the Parties.

“PRIOR MTA” means the Material Transfer Agreement, made on [***], by and between
the Parties, wherein Pieris and Zydus have agreed that Zydus shall conduct
Research Program as set forth in Exhibit B attached to the Original Agreement.

“RECIPIENT” means the Party receiving the Confidential Information from the
other Party.

“REGULATORY AUTHORITY” means, in a particular country or geographical region
(each, hereafter, is a regulatory jurisdiction), any applicable Governmental
Authority involved in granting Marketing Approvals and/or to the extent required
in such country or region, pricing approval of a Product in such country or
region, including without limitation: (a) in India, the ICMR (Indian Council of
Medical Research), DCGI, CDSCO (Central Drugs Standard Control Organization),
and any other applicable Governmental Authority in India having jurisdiction
over such Product, and any successor Governmental Authority having substantially
the same function; (b) in the U.S., the FDA, and any other applicable
Governmental Authority in the U.S. having jurisdiction over such Product; and
(c) any foreign equivalent of (a) or (b), such as in EU, the EMA.

“REGULATORY LAW” means any applicable statutes, ordinances, regulations, rules
or orders of any kind whatsoever of any Governmental Authority governing the
Development, import, export, manufacture or distribution of a Product
(including, without limitation, Marketing Approvals) together with any rules and
regulations promulgated thereunder.

“REGULATORY MATERIALS” means any regulatory applications, submissions,
notifications, registrations, approvals and/or other filings made to or with a
Regulatory Authority that may be necessary or reasonably desirable to research,
develop, make, have made, use, sell, have sold, offer for sale and import/export
Product, and shall include without limitation, NDAs and IND Applications or
their equivalents in other jurisdictions.

“REGULATORY SUBMISSION” means the submission by either Party or any of its
Affiliates or Sublicensees of Regulatory Materials to a Regulatory Authority for
the purpose of seeking relevant or required approvals for a Product Launch
including the Marketing Approval.

“RESEARCH” means any and all activities undertaken under the Plans with respect
to the research and pre-clinical evaluation of compounds for the Development of
a Product.

“RELATED THIRD PARTY” means any Third Party [***].

“SUBLICENSEE” means any Third Party to which either Party grants any right to
make, have made, use, sell, have sold, offer for sale and/or import/export
Product in accordance with Article 2. For the avoidance of doubt, a [***].

“TERM” has the meaning provided in Section 11(1).

“TERRITORY” shall mean the Pieris Territory or the Zydus Territory, as
applicable.

“TERRITORIES” shall mean both the Pieris Territory and the Zydus Territory.

“THIRD PARTY” means any Person other than Pieris or Zydus and their respective
Affiliates.

 

Portions of the exhibit, indicated by the mark “[***],” were omitted and have
been filed separately with the Securities and Exchange Commission pursuant to
the Registrant’s application requesting confidential treatment pursuant to Rule
24b-2 of the Securities Exchange Act of 1934, as amended.

 

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“TIMELINES” means those timelines to be met by Zydus or Pieris in relation to
Zydus Activities or Pieris Activities (as applicable) as set forth in Schedule 3
hereto, as may be agreed, updated and amended between the Parties. [***].

“ZYDUS ACQUIRED IP” means all Information, know-how, intellectual property,
including Improvements and any and all inventions, Patents, copyrights and
trademarks and other rights, in each case necessary to the Development and/or
Commercialization of a Product and over which Zydus acquires Control during the
Term.

“ZYDUS ACTIVITIES” means the activities undertaken by Zydus hereunder in
relation to (i) the Research, Development, manufacture and Commercialization in
the Zydus Territory pursuant to the terms of this Agreement and (ii) its
obligations in respect of the grant of the License and as stated in Article 3
and Schedule 3 herein.

“ZYDUS ARISING IP” means all intellectual property, including Improvements and
any Information, inventions and Patents [***], during the Term, under the Plans,
as well as during the term of the Prior MTA.

“ZYDUS CONFIDENTIAL INFORMATION” means all Zydus Rights and all Information
disclosed or provided by, or on behalf of, Zydus to Pieris in connection with
this Agreement, whether by letter or by the use of an appropriate proprietary
stamp or legend. Notwithstanding the foregoing, Information which is orally or
visually disclosed, or is disclosed in writing without an appropriate letter,
proprietary stamp or legend, shall constitute Zydus Confidential Information if
Zydus, within [***] days after such disclosure, delivers to Pieris a written
document or documents describing such Confidential Information and referencing
the place and date of such oral, visual or written disclosure.

“ZYDUS KNOW-HOW” means all Information that Zydus Controls as of the Effective
Date relating to a Product, necessary to enable Pieris to conduct the Pieris
Activities or exercise/use the License granted hereunder. Zydus Know-How does
not include the Zydus Patents.

“ZYDUS PATENTS” means all Patents Controlled by Zydus as of the Effective Date
that are necessary to enable Pieris to conduct the Pieris Activities or
exercise/use the License granted hereunder, together with the Information
contained therein.

“ZYDUS RIGHTS” means Zydus Patents and Zydus Know-How.

“ZYDUS TERRITORY” means all regions/countries set forth in Schedule 4 attached
hereto.

ARTICLE 2

THE LICENSE

1) LICENSE GRANTS

a) Subject to the terms and conditions of this Agreement such as Section 2(5)
and Article 4, Pieris hereby grants to Zydus (a) an exclusive [***]
royalty-bearing license under the Pieris Rights, the Pieris Arising IP, the
Pieris Acquired IP and Pieris’ interests in the Joint Arising IP and the Joint
Patents, with the right to grant sublicenses to Sublicensees, to use, have used,
sell, have sold, offer for sale and import/export Product in the Zydus Territory
in the Field; (b) a [***] license under the Pieris Rights, the Pieris Arising
IP, the Pieris Acquired IP and Pieris’ interests in the Joint Arising IP and the
Joint Patents, with the right to grant sublicenses to Sublicensees, (i) to
research, develop, make or have made a Product (including, without limitation,
the DP or DS thereof) in the Zydus Territory in the Field, by itself or

 

Portions of the exhibit, indicated by the mark “[***],” were omitted and have
been filed separately with the Securities and Exchange Commission pursuant to
the Registrant’s application requesting confidential treatment pursuant to Rule
24b-2 of the Securities Exchange Act of 1934, as amended.

 

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through an Affiliate or a Third Party; and (ii) to conduct Research and/or
Development and manufacture of a Product (including, without limitation, the DP
or DS thereof), by itself or through an Affiliate or a Third Party, in the
Pieris Territory in the Field so long as such activities are solely in support
of Development and/or Commercialization in the Zydus Territory in the Field; and
(iii) a [***], [***] license under the Pieris Arising IP and Pieris’ interests
in the Joint Arising IP, with the right to grant sublicenses, to exploit Zydus’
know-how and intellectual property available at Zydus before the Effective Date
in a manner consistent with the terms and conditions of this Agreement such as
Subsections (a) and (b) above as well as Section 2(4).

b) Subject to the terms and conditions of this Agreement such as Section 2(5)
and Article 4, Zydus hereby grants to Pieris (a) [***] license under the Zydus
Rights, the Zydus Arising IP, the Zydus Acquired IP and Zydus’ interests in the
Joint Arising IP and the Joint Patents, with the right to grant sublicenses to
Sublicensees, to use, have used, sell, have sold, offer for sale and
import/export Product in the Pieris Territory in the Field; (b) a [***] license
under the Zydus Rights, the Zydus Arising IP, the Zydus Acquired IP and Zydus’
interests in the Joint Arising IP and the Joint Patents, with the right to grant
sublicenses to Sublicenses, but subject to Section 5(2), (i) to research,
develop, make or have made a Product (including, without limitation, the DP or
DS thereof) in the Pieris Territory in the Field, by itself or through an
Affiliate or a Third Party; and (ii) to conduct Research and/or Development and
manufacture of a Product (including, without limitation, the DP or DS thereof),
by itself or through an Affiliate or a Third Party, in the Zydus Territory in
the Field so long as such activities are solely in support of Development and/or
Commercialization in the Pieris Territory in the Field; and (iii) a [***]
license under the Zydus Arising IP and Zydus’ interests in the Joint Arising IP,
with the right to grant sublicenses, to exploit Pieris’ know-how and
intellectual property available at Pieris before the Effective Date in a manner
consistent with terms and conditions of this Agreement such as Subsections
(a) and (b) above Section 2(4), [***].

c) The rights described in the preceding paragraphs of this Section 2(1) are
referred as the “License” in this Agreement.

2) Formal Licenses

 

  •   The Parties shall execute such formal licenses in accordance with terms
and conditions set out in Section 2(1), whenever such formal licenses are
necessary for registration with relevant patent offices and other relevant
authorities in particular countries throughout the Territories.

 

  •   Prior to the execution of the formal licenses (if any) referred to in this
Section 2(2), the Parties shall so far as possible have the same rights and
obligations towards one another as if such licenses had been granted. In the
event of any conflict in meaning between any such license and the provisions of
this Agreement, the provisions of this Agreement shall prevail wherever
possible.

3) NO IMPLIED LICENSES

Only the licenses granted pursuant to the express terms of this Agreement shall
be of any legal force or effect. No other license rights shall be created by
implication, estoppel or otherwise.

4) NON-COMPETE

The Parties agree that, during the Term [***], neither Party nor its
Affiliate(s) shall, directly or indirectly, (a) sell a Product (including,
without limitation, the DP or DS thereof) in the other Party’s Territory in the
Field or (b) enable a Third Party to sell the Product (including, without
limitation, the DP or DS thereof) in the other Party’s Territory in the Field.

 

Portions of the exhibit, indicated by the mark “[***],” were omitted and have
been filed separately with the Securities and Exchange Commission pursuant to
the Registrant’s application requesting confidential treatment pursuant to Rule
24b-2 of the Securities Exchange Act of 1934, as amended.

 

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5) COMMERCIALLY REASONABLE EFFORTS

a) Subject to Article 11 and Section 4(4), Zydus shall use Commercially
Reasonable Efforts in and take the overall responsibilities for (i) [***] and
(ii) [***]. Further, Zydus shall use Commercially Reasonable Efforts [***].
Following [***] and during the Development, Zydus may sublicense the License to
a Third Party in accordance with this Article 2, to co-develop the Product with
the Third Party within the Zydus Territory, provided, however, that [***].

b) Subject to Article 11 and Section 4(4) and following [***], Pieris shall use
Commercially Reasonable Efforts in [***].

c) Subject to Article 11, both Parties shall use Commercially Reasonable Efforts
to (i) name the Product 2 through the CC, and (ii) agree on its respective Field
and the financial rights and obligations between the Parties with respect to the
Product 2; within [***] months after the Effective Date.

ARTICLE 3

ZYDUS ACTIVITIES; PIERIS ACTIVITIES; COORDINATION COMMITTEE.

1) SCOPE OF ZYDUS RESPONSIBILITIES

a) SCOPE. Zydus shall control, be obligated to conduct, and be solely
responsible for the Zydus Activities in accordance with the Plans. Zydus shall
perform the Zydus Activities with reasonable care and skill. Zydus Activities
shall include, without limitation:

 

  i. Conducting and/or continuing to conduct the Research Program (as defined in
the Prior MTA) in accordance with Exhibit B of the Prior MTA, including
expressing Product 1 through Pieris Material set out in Schedule 5 attached
hereto this Agreement;

 

  ii. Conducting animal [***] efficacy and toxicology testing necessary for the
preparation and filing of IND Applications with the respective local Regulatory
Authorities within the Zydus Territory (e.g. the DCGI in India) for a Product,
and which testing is acceptable per ICH-GCP guidelines;

 

  iii. Conducting suitable clinical trials [***] in the Zydus Territory as per
ICH-GCP guidelines and conforming to the aforementioned Regulatory Authorities’
requirements for IND Applications. The sample size for conducting clinical
trials shall meet said Regulatory Authorities’ requirements, as detailed and
agreed by the Parties through the CC.

For avoidance of doubt, [***].

 

  iv. Conducting clinical trials as per ICH-GCP guidelines and necessary for
Marketing Approvals of the Product throughout the Zydus Territory; all aspects
of such clinical trials, including but not limited to the trial design and the
number of patients enrolled, shall be as detailed and agreed by the Parties
through the CC and set forth in the Plans;

 

  v. Developing and optimizing processes and procedures used to manufacture and
formulate the Drug Product to achieve a yield that is sufficient to deliver
adequate amounts of Drug Product for Development and Commercialization;

 

  vi. Production of the Drug Substance for pre-clinical studies throughout the
Development in the Zydus Territory per applicable Regulatory Authorities’
requirements;

 

Portions of the exhibit, indicated by the mark “[***],” were omitted and have
been filed separately with the Securities and Exchange Commission pursuant to
the Registrant’s application requesting confidential treatment pursuant to Rule
24b-2 of the Securities Exchange Act of 1934, as amended.

 

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  vii. Performance of formulation, fill and finish of the Drug Substance and/or
Drug Product and subsequent activities necessary for achieving the yield of
Section 3(1)(a)(iv);

 

  viii. Manufacturing of the Drug Product per ICH-GMP guidelines, and conforming
to the Indian Regulatory Authorities’ requirements, for Development and
Commercialization and supplying sufficient amounts of Drug Product for the
clinical trials in the Zydus Territory as referred in Section 3(1)(a)(iii); and

 

  ix. Providing data (such as data of clinical trials and CMC data) to
Regulatory Authorities within the Territories, when any one of said Authorities
so requires from either Party or its Affiliates or Sublicensees.

b) COSTS. Zydus shall be solely responsible for all costs and expenses arising
from and/or relating to the Zydus Activities from the Effective Date. Zydus
shall also be solely responsible for all Third Party costs and expenses incurred
by Zydus and not included in the Plans related to Research, Development and/or
Commercialization.

c) INFORMATION DISSEMINATION BY ZYDUS. Zydus shall promptly share with Pieris,
and provide Pieris with total access to, all data and reports generated by Zydus
during the Term relating to Product, including all such data and reports
generated pursuant to this Article 3 and Article 6, all Regulatory Materials,
Zydus Arising IP, Joint Arising IP, Zydus Acquired IP, Zydus Know-How, safety
data information and other Information generated by Zydus on an “AS IS” basis,
for use by Pieris with regard to the Development in the Pieris Territory. For
the avoidance of doubt, [***]. Zydus shall fulfill its obligations under this
paragraph on at least a semi-annual basis throughout the Term.

2) SCOPE OF PIERIS RESPONSIBILITIES

a) SCOPE. Pieris shall control, be obligated to conduct, and be solely
responsible for the Pieris Activities in accordance with the Plans. Pieris shall
perform the Pieris Activities with reasonable care and skill. Pieris Activities
shall include, without limitation:

 

  i. Conducting [***] experiments of a Product pursuant to the respective Plan;
[***];

 

  ii. Sharing the data, generated in Subsection (i) above, with Zydus, such as,
[***];

 

  iii. Transferring to Zydus all clones, know-how / technologies for cloning,
and upstream-and/or-downstream-process-development know-how, available at
Pieris, with respect to the Product;

 

  iv. Supporting Zydus in developing and optimizing processes and procedures
used to manufacture and formulate the Drug Substance and/or the Drug Product;
and

 

  v. Developing (together with Zydus) the clinical and regulatory strategy for
the Product in the Zydus territory.

 

  vi. In case Pieris performs one or more clinical trials itself for a Product,
the terms and conditions of this Agreement shall not change.

 

  vii. Providing then-existing data (such as data of clinical trials and CMC
data) to Regulatory Authorities within the Territories, when any one of said
Authorities so requires.

b) COSTS. Pieris shall be solely responsible for all costs and expenses arising
from and/or relating to the Pieris Activities [***] in the Pieris Territory from
the Effective Date. Pieris shall also be solely responsible for all Third Party
costs and expenses incurred by Pieris and not included in the Plans related to
Research, Development and/or Commercialization.

 

Portions of the exhibit, indicated by the mark “[***],” were omitted and have
been filed separately with the Securities and Exchange Commission pursuant to
the Registrant’s application requesting confidential treatment pursuant to Rule
24b-2 of the Securities Exchange Act of 1934, as amended.

 

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c) INFORMATION DISSEMINATION BY PIERIS. Pieris shall share with Zydus and
provide (i) upon request of the CC, copies of clinical trial results and
stability data for Product in existence as of the Effective Date, and any data,
materials, Pieris Arising IP, Joint Arising IP, Pieris Acquired IP, safety data
information and other Information generated by Pieris during the Term relating
to Product, and (ii) Zydus with access to, and copies of, any technical
information relating to Product and in its possession at the Effective Date and
which is requested by a Regulatory Authority. The information described in
(i) and (ii) of the preceding sentence is for use by Zydus with regard to the
Development solely in the Zydus Territory. For the avoidance of doubt, [***].

3) COORDINATION COMMITTEE

(a) Scope and Responsibilities of the CC. For the purpose of open and effective
communication between each Party on all ongoing matters with regard to the Zydus
Activities and the Pieris Activities, the Parties shall, within [***] days of
the Effective Date, establish the CC and hold the first meeting. The purpose of
the CC shall be to set the overall strategy for Development of a Product and to
monitor and govern the activities of the Parties in relation to Research and
Development and the manufacturing and Commercialization, and the CC shall have
the following specific responsibilities:

(i) Determination of Additional Product(s), including Product 2;

(ii) Preparation of, and agreement upon, Plans;

(iii) Modification and/or amendment of the Plans;

(iv) Information and data dissemination and provision of detailed progress
updates between the Parties related to the Zydus Activities and the Pieris
Activities;

(v) Oversight of [***] the Party’s Development, manufacture and
Commercialization activities conducted under this Agreement following [***]; and

(vi) Any other matters which the Parties agree, throughout the Term, should be
discussed by or decided upon by the CC.

(b) Membership. The CC will be comprised of at least [***] members [***] and the
initial membership shall be as set forth in Schedule 2.

(c) Chairmanship. The CC shall appoint a Chairman from among its members. The
role of Chairman shall be to convene and preside at meetings of the CC. The
Chairmanship shall alternate between a Zydus member of the CC and a Pieris
member of the CC, on a semi-annual basis.

(d) Quorum and Decision-Making. The presence of at least [***] shall constitute
a quorum for the purpose of consideration and action of the CC. All decisions of
the CC shall be unanimous vote, with each Party having one vote. In the event
that the CC fails, after good faith efforts, to arrive at a decision, the matter
shall be referred to the President or CEO of each Party for resolution except
for the situation referred in Section 3(3)(e) below. In the event that the
President(s) or CEO(s) cannot resolve the matter within [***] days, the matter
may be submitted for Dispute resolution pursuant to Article 12.

(e) In case the CC is unable to reach a consensus, via unanimous vote, on [***],
then [***]; provided, however, that [***].

(f) Meetings. The CC shall meet [***] throughout the Term. Such meetings may be
in-person, via videoconference or via teleconference. In-person meetings will be
held alternately at Zydus’ premises at Ahmedabad, India and Pieris’ premises in
Freising, Germany, unless the Parties otherwise agree. Each Party will bear the
expenses of its participation in meetings. [***] days prior to each meeting,
each Party shall provide written notice to the other Party of agenda items for
the meeting, together with appropriate information related thereto. The first CC
meeting shall be held within [***] days of the Effective Date. Non-member
Authorized Persons of either Party can also attend such meetings.

 

Portions of the exhibit, indicated by the mark “[***],” were omitted and have
been filed separately with the Securities and Exchange Commission pursuant to
the Registrant’s application requesting confidential treatment pursuant to Rule
24b-2 of the Securities Exchange Act of 1934, as amended.

 

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(g) Minutes. Material information provided or discussed at a CC meeting will be
documented and signed by both Parties within [***] days of the end of the
meeting. Reasonably detailed written minutes will be kept of all meetings and
will reflect, without limitation, material information provided at such
meetings. Responsibility for drafting the minutes will be held by the Party that
has Chairmanship of the CC at the applicable meeting. The draft minutes are
subject to the other Party’s review, comment and/or approval within [***] days
of receipt from the drafting Party. Failure by the other Party to provide
comments within such [***] day period shall be deemed to be an approval of the
applicable draft minutes.

4) INFORMATION MANAGEMENT

The Parties agree to work together to identify methods appropriate for
dissemination of information. Subject to the terms of this Agreement, each Party
shall ensure that upon reasonable notice, it shall: (i) make its employees and
non-employee consultants reasonably available to the other Party on issues in
relation to the Development, including, without limitation, on regulatory,
scientific, technical and clinical issues; and (ii) allow a reasonable number of
appropriately qualified representatives of the other Party to have access to
written records, accounts, notes, reports and data relating to the activities
hereunder. The CC shall be responsible for arranging such information audit(s)
referred in Section 3(5) or other procedures.

5) INFORMATION AUDITS AND SHARING

Pieris may carry out [***] of the facility of Zydus at which the Product(s) are
manufactured, as well as the documentation generated in connection with the
manufacture and testing of Product(s), including all relevant standard operating
procedures. Such audit, which shall typically last no longer than [***] days,
will take place during regular business hours and upon no less than four
(4) weeks’ prior written notice by Pieris. In addition, Pieris shall be entitled
to perform additional for cause audits upon [***] days’ prior written notice,
including without limitation in the event of (i) any documented [***] regarding
the Product(s) or the process of making the Product(s) (for example but not
limited to [***] or (ii) any [***] during a Regulatory Authority’s inspection or
audit where such inspection or audit relates to the Product(s) or the process of
making the Product(s); and Zydus shall immediately share with Pieris any and all
findings during a Regulatory Authority’s inspection or audit where such
inspection or audit relates to the Product(s) or the process of making the
Product(s). All audits mentioned above will be carried out by Pieris at Pieris’
own costs but free of charge to Zydus. Notwithstanding the foregoing, [***].

6) DEBARMENT

In the course of the Development of Products, neither Party shall use, during
the Term, any employee, agent or independent contractor who has been debarred by
any Regulatory Authority, or, to the best of such Party’s knowledge, is the
subject of debarment proceedings by a Regulatory Authority;

ARTICLE 4

CONTINUED DEVELOPMENT AND COMMERCIALIZATION

1) [***]

The Zydus Activities and the Pieris Activities are intended to progress the
clinical Development of each Product through the [***] conducted by Zydus in the
Zydus Territory pursuant to the respective Plan, including, without limitation,
[***].

 

Portions of the exhibit, indicated by the mark “[***],” were omitted and have
been filed separately with the Securities and Exchange Commission pursuant to
the Registrant’s application requesting confidential treatment pursuant to Rule
24b-2 of the Securities Exchange Act of 1934, as amended.

 

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2) CONTINUED ACTIVITIES IN A PARTY’S TERRITORY

(a) [***], (i) [***] and (ii) [***]. In addition, the Parties may elect to
co-develop such Product [***] by mutual agreement. If both Parties elect to
co-develop a Product, then the resulting ownership share shall be as the Parties
mutually agree in a separate agreement. During the Term, each Development Party
shall share all data generated in the continued Development of a Product in its
Territory with the non-Development Party, so long as neither Party has opted out
under Section 4(4).

 

(b) If, [***] Pieris has not, [***], then Pieris shall [***]. If [***], or if
[***], then [***].

3) CONTINUED DEVELOPMENT IN PORTIONS OF THE PIERIS TERRITORY [***]

[***], if Pieris [***], Pieris shall promptly notify Zydus [***] and shall
[***], wherein [***] will agree that (i) [***]; (ii) [***]. For the avoidance of
doubt, [***]. For the avoidance of doubt, [***] under this Agreement [***].

4) OPT-OUT OF DEVELOPMENT BY A PARTY IN ITS TERRITORY

(a) [***], either Party shall be permitted to discontinue the Development and/or
Commercialization of a Product and inform the other Party about such
discontinuation pursuant to Section 13(3), in which case the other Party shall
have the right to elect, by notifying the first Party pursuant to Section 13(3),
to continue the Development and/or Commercialization of the Product and shall be
designated as the sole-continuing Party for such Product. In case the other
Party does so elect, it [***]. The Party ceasing to continue the Development
and/or Commercialization of the Product (the “Opt-Out Party”) shall [***] the
Party continuing such Development and/or Commercialization (the “Continuing
Party”). Further, the License granted by the Continuing Party to the Opt-Out
Party hereunder shall terminate concurrently, and the License granted by the
Opt-Out Party to the Continuing Party hereunder shall survive such termination
and remain in effect, subject to the terms and conditions of this Agreement
applicable thereto.

(b) Notwithstanding Article 7, the Opt-Out Party shall [***] in relation to
[***] as follows:

(i) if the Continuing Party [***], the Continuing Party will [***] in accordance
with Section [***]; provided, however, that [***] as mentioned in Section [***];

(ii) if the Continuing Party [***], the Continuing Party will [***] in
accordance with Section [***];

(iii) if the Continuing [***], the Continuing Party will [***]; provided,
however, that [***] as mentioned in Section [***]; and/or

(iv) if the Continuing Party [***], the Continuing Party [***] in accordance
with Section [***].

(c) The Parties agree that the Opt-Out Party will be notified once [***]. For
the avoidance of doubt, [***].

(d) [***] of same nature, related to [***] shall be agreed between the Parties
in good faith [***].

5) OUTLICENSING

(a) Except where Pieris opts out under Section 4(4), Pieris [***]. Terms of the
Outlicensing agreement shall [***]. Pieris will keep Zydus regularly informed of
the progress of any Outlicensing in the Pieris Territory through regular reports
to the CC. Zydus [***]. During the term, Pieris may Outlicense the Product in
the Zydus Territory in case Zydus, during the Term, opts out under Section 4(4).

 

Portions of the exhibit, indicated by the mark “[***],” were omitted and have
been filed separately with the Securities and Exchange Commission pursuant to
the Registrant’s application requesting confidential treatment pursuant to Rule
24b-2 of the Securities Exchange Act of 1934, as amended.

 

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(b) Zydus will, at Pieris’ request, cooperate in the preparation of such
information and materials, participate in such presentations, due diligence
procedures and other meetings and otherwise contribute toward such efforts as
may be required to negotiate and complete any such Outlicensing in the Pieris
Territory. Zydus shall grant such licenses and other rights to, and cooperate
with, such Sublicensee as reasonably necessary to enable the Sublicensee to
further develop and commercialize the Product in the Pieris territory and in the
applicable Filed.

(c) Payments by Pieris to Zydus in connection with [***] shall be made [***].

(d) During the Term [***] Territory, Zydus may Outlicense a Product [***],
except where Zydus opts out under Section 4(4). During the Term, Zydus may
Outlicense the Product in the Pieris Territory in case Pieris opts out under
Section 4(4).

(e) Nothing in this Agreement shall [***].

(f) Each Party will decide the procedures for Outlicensing the Product(s) in its
respective Territory. Within [***] days of [***] related to a Product in [***],
in each case within the one Party’s Territory, that Party shall [***]. Any [***]
shall be considered part of the providing Party’s Confidential Information.

6) OUTLICENSING RESTRICTIONS

Neither Party shall contact Third Parties to discuss any potential Outlicenses
other than such Outlicenses as are permitted pursuant to Section 4(5). During
the Term, each Party shall notify the other Party of any unsolicited contacts
from Third Parties that relate to any potential Outlicenses, except for such
Outlicenses as are permitted pursuant to Section 4(5).

ARTICLE 5

MANUFACTURING

1) MANUFACTURING OF PRODUCT BY ZYDUS IN THE ZYDUS TERRITORY

For the avoidance of doubt, [***], [***].

2) MANUFACTURING AND SUPPLY AGREEMENT FOR THE PIERIS TERRITORY

Subject to Section [***], [***]. Notwithstanding the foregoing, [***], if [***],

Zydus shall use Commercially Reasonable Efforts and negotiate in good faith,
with Pieris, its Affiliates, its Sublicensees and/or its successor-in-interest,
the manufacturing and supply terms for the Product (including the API thereof),
to be undertaken at Zydus’ facilities, which shall be reflected in a definitive
manufacturing and supply agreement (the “Manufacturing and Supply Agreement”)
containing customary terms and conditions of a contract manufacture and supply
agreement, with the objective that Zydus is the world-wide supplier of the
Product (including the API thereof). Notwithstanding the foregoing, [***].

[***] Notwithstanding the foregoing, [***], [***], provided, however, that the
Third Party must be bound by obligations of confidentiality and non-use at least
as equivalent in scope as and no less restrictive than those set forth in this
Article 8. [***].

 

Portions of the exhibit, indicated by the mark “[***],” were omitted and have
been filed separately with the Securities and Exchange Commission pursuant to
the Registrant’s application requesting confidential treatment pursuant to Rule
24b-2 of the Securities Exchange Act of 1934, as amended.

 

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ARTICLE 6

REGULATORY

1) GENERAL

Pieris and Zydus, respectively, shall assume sole responsibility for the
preparation, submission and maintenance of Regulatory Materials and for seeking
Marketing Approvals in the Pieris Territory and the Zydus Territory,
respectively. Such responsibilities shall include seeking necessary approvals
from Regulatory Authorities for any label, labeling, package inserts and
packaging, samples and promotional materials to be used in their respective
Territory for Product and continuing relations with, and responding to inquiries
and other communications of, applicable Regulatory Authorities.

2) REGULATORY MATERIALS.

All Regulatory and Marketing Approvals in the Zydus Territory and the Pieris
Territory, respectively, shall be held in the respective name of, and shall be
owned by, the respective Party. A Party shall consult with the other Party in
its preparation of Regulatory Materials and in relation to any Regulatory
Submission, and shall keep each other fully informed of any Regulatory Authority
review, and approval of Regulatory Materials filings and Regulatory Submission
in their respective Territory. Each Party shall be entitled to integrate data
within the other Party’s Control into its Regulatory Materials and, pursuant to
the terms of this Agreement, shall have full access to the manufacturing data
within the other Party’s Control to assist with preparation of its Regulatory
Materials. Neither Party shall file any Regulatory Materials with any Regulatory
Authority without the prior written consent of the other Party, such consent not
to be unreasonably withheld, conditioned or delayed in light of the intent and
purposes of this Agreement.

3) GENERAL REGULATORY ASSISTANCE AND ACCESS TO REGULATORY INFORMATION.

Each Party will cooperate and provide the other Party with all Information and
assistance reasonably necessary for such other Party to carry out and comply
with any regulatory obligations or requirements of Regulatory Authorities for
each Product in connection with the Research and/or Development and/or the
manufacture and/or Commercialization in such other Party’s Territory to the
extent contemplated under the terms and intent of this Agreement, including,
without limitation, providing such Information and assistance to such other
Party as is necessary for such other Party to: (i) submit, obtain, maintain and
update Regulatory Material for each Product with Regulatory Authorities in such
other Party’s regulatory jurisdiction (including, without limitation, sharing
clinical data, pre-clinical data, Development data, manufacturing data, and
notes and documents related to discussions with Regulatory Authorities in
connection with such Regulatory Material); (ii) submit or file promotional
materials with Regulatory Authorities in connection with the Products in the
other Party’s regulatory jurisdiction; and (iii) comply with any other
requirements of Regulatory Authorities in connection with the Products in the
other Party’s regulatory jurisdiction.

ARTICLE 7

PAYMENTS, TERM AND FINANCIAL REPORTING

1) PAYMENTS [***]

a) DEVELOPMENT MILESTONE PAYMENTS [***]

 

Portions of the exhibit, indicated by the mark “[***],” were omitted and have
been filed separately with the Securities and Exchange Commission pursuant to
the Registrant’s application requesting confidential treatment pursuant to Rule
24b-2 of the Securities Exchange Act of 1934, as amended.

 

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To the extent [***], Zydus shall pay to Pieris milestone payments in accordance
with the following schedule and amounts:

 

Stage

   Amount
(USD)  

[***]

   $ [***]   

b) DEVELOPMENT MILESTONE PAYMENTS [***]

To the extent [***], Pieris shall pay to Zydus milestone payments in accordance
with the following schedule and amounts:

 

Event

   Amount
(USD)  

[***]

   $ [***]0   

[***]

   $ [***]   

2) [***]

If [***], Pieris shall share the Revenue with Zydus in accordance with [***] as
stipulated below:

 

Development Phase in the Zydus Territory by Zydus

   Pieris      Zydus  

[***]

     [***]         [***]   

[***]

     [***]         [***]   

[***]

     [***]         [***]   

[***]

     [***]         [***]   

Pieris agrees that if [***], then Pieris shall share [***] of such [***] Revenue
with Zydus. If [***], then Pieris and Zydus shall [***].

Pieris agrees to promptly notify Zydus [***], to provide a reasonable amount of
time for an audit set forth in this [***]. For the avoidance of doubt, [***].

(B) [***]

Upon and following [***], Revenue [***] in [***] shall be shared between the
Parties in the following proportion:

 

Pieris

   Zydus  

[***]

     [***]   

 

Portions of the exhibit, indicated by the mark “[***],” were omitted and have
been filed separately with the Securities and Exchange Commission pursuant to
the Registrant’s application requesting confidential treatment pursuant to Rule
24b-2 of the Securities Exchange Act of 1934, as amended.

 

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Zydus agrees to promptly notify Pieris [***].

3) ROYALTY OBLIGATIONS.

a) ROYALTY PAYABLE TO PIERIS

For [***], except [***], Zydus shall pay Pieris a [***] tiered royalty as
described in Section 7(3)(c) on all Net Sales sold by Zydus and its Affiliates
(x) in the Zydus Territory [***], or (y) in the Pieris Territory, in case Pieris
opts out and Zydus elects to continue under Section 4(4); provided, however,
that, in the Pieris Territory, the [***]% tiered royalty will [***]. All royalty
payments due under this Section 7(3)(a) (“Zydus’ Royalty Obligation”) shall be
made on a quarterly basis (i.e., within thirty (30) days after 31st March,
30th June, and 30th September and 31st December). For clarity, [***].

b) ROYALTY PAYABLE TO ZYDUS

For [***], except [***], [***], Pieris shall pay Zydus a [***]% tiered royalty
as described in Section 7(3)(c) on all Net Sales sold by Pieris and its
Affiliates (x) in the Pieris Territory [***], or (y) in the Zydus Territory, in
case Zydus opts out and Pieris elects to continue under Section 4(4); provided,
however, that, in the Pieris Territory, the [***] tiered royalty will [***]. All
royalty payments due under this Section 7(3)(b) (“Pieris’ Royalty Obligation”)
shall be made on a quarterly basis (i.e,. within thirty (30) days after
31st March, 30th June, and 30th September and 31st December). For clarity,
[***].

c) TIERED ROYALTY RATES

 

Net-Sales (USD)

   Royalty rate  

[***]

     [***] % 

[***]

     [***] % 

[***]

     [***] % 

4) PAYMENT CONDITIONS.

The payment obligation of the Parties hereunder shall accrue as and when a Party
or its respective Affiliates (as applicable) first receives any such amounts
that bear (i) the Royalty Obligations on Net Sales set forth in Section 7(3) or
(ii) the Revenue Obligations set forth in Section 7(1) ((i) and (ii) as
applicable), respectively (each a “Payment Obligation”). Notwithstanding the
foregoing, the Payment Obligation of one Party shall be subject to the following
conditions, as may be applicable:

 

  a) [***];

 

  b) [***];

 

  c) [***];

 

  d) [***].

 

  e) [***].

 

Portions of the exhibit, indicated by the mark “[***],” were omitted and have
been filed separately with the Securities and Exchange Commission pursuant to
the Registrant’s application requesting confidential treatment pursuant to Rule
24b-2 of the Securities Exchange Act of 1934, as amended.

 

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5) PAYMENT TERM. One Party’s Royalty Obligation under Section 7(3) will
terminate upon the date which is the later of: (i) [***]; or (ii) [***] provided
that, [***].

6) REPORTS. Following (x) the accrual of a Party’s payment obligations arising
from Sections 7(1), 7(2) and/or 7(3) above (hereafter “Payment Obligations”) and
(y) until this Agreement expires or is terminated under Article 11 (the duration
between (x) and (y) is hereafter referred as the “Reporting Period”), such
Party, on behalf of itself, its Affiliates and Sublicensees, shall furnish to
the other Party a written report on [***] basis [***], accounting for the Net
Sales of the Product subject to royalty obligations sold by it and/or its
Affiliates in its Territory during the Reporting Period and any Pieris Revenue
or Zydus Revenue, as the case may be, subject to the Payment Obligations,
received by it and/or its Affiliates during the Reporting Period, and detailing
the Payment Obligations under this Agreement. Each such report shall state,
separately for such Party and each Affiliate, the number, description, and
aggregate Pieris Revenues or Zydus Revenues, as the case may be, and aggregate
Net Sales, on a [***] basis during the calendar quarter during which a Payment
Obligation is payable. The reports required pursuant to this Section 7(6) shall
be provided to the other Party contemporaneously with the payment of the
Payments Obligations hereunder. All sums due under this Agreement shall be made
by the due date, failing which a Party may charge the other Party interest on
any outstanding amount on a [***] basis at a rate [***].

7) MAINTENANCE OF RECORDS. The Parties shall keep and maintain (and cause to be
kept and maintained) complete and accurate records of the Net Sales and Pieris
Revenues and Zydus Revenues, as the case may be, by such Party and/or their
respective Affiliates and Sublicensees. The Parties shall retain such records
for [***] years after the close of any Calendar Year.

8) FINANCIAL AUDITS.

(a) Upon [***] days’ prior written notice, no more frequently than [***] in each
period of [***] months and no later than [***] years following the applicable
period of time, an independent certified public accounting firm of nationally
recognized standing, reasonably acceptable to the Parties, at the expense of the
Party initiating such request, shall have access during normal business hours to
such of the records of the other Party and its Affiliates, as applicable, as may
be reasonably necessary to verify the accuracy of the Revenue/royalty reports
(as applicable) hereunder in relation to Net Sales as applicable, and any
royalties or other payments due thereon. The accounting firm shall be under a
duty to keep confidential any other information obtained from such reports. Each
Party shall cooperate with the audit. The results of any audit shall be shared
by the auditing Party with the audited Party. The fees charged by such
accounting firm shall be paid by the Party initiating such request; provided,
however, that if there is a discrepancy of an underpayment of more than [***] in
the Royalty/Revenue amounts, the Party initiating the request may (i) charge the
other Party interest on any outstanding amount on a [***] basis at a rate
equivalent to [***], and (ii) [***].

(b) If such accounting firm concludes that additional payments were owed during
such period, the Party so owing the payment shall pay the additional payments
within [***] days of the date the other Party delivers to the Party owing the
payment, such accounting firm’s written report so correctly concluding;
provided, however, that [***], [***].

(c) Each Party shall include in each sublicence granted by it pursuant to this
Agreement a provision requiring its respective Sublicensees to make reports to
it, to keep and maintain records of sales made pursuant to such sublicence and
to grant access and audit rights to such records by the mutually selected
independent accountant.

 

Portions of the exhibit, indicated by the mark “[***],” were omitted and have
been filed separately with the Securities and Exchange Commission pursuant to
the Registrant’s application requesting confidential treatment pursuant to Rule
24b-2 of the Securities Exchange Act of 1934, as amended.

 

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(d) The Parties shall treat all financial information subject to review under
this Article 7 or under any sublicence agreement, in accordance with the
confidentiality provisions of this Agreement, and shall cause the accounting
firm to enter into a reasonably acceptable confidentiality agreement with the
concerned Party obligating it to retain all such financial information in
confidence pursuant to such confidentiality agreement.

9) PAYMENT CURRENCY AND EXCHANGE RATE. All payments to be made by either Party
to the other Party under this Agreement shall be made in U.S. dollars (USD) and
shall be paid by bank wire transfer to such bank account designated in writing
by the other Party from time to time. In the case of sales/revenues which are
invoiced/recorded in a foreign currency exchange, conversion of such sales into
USD will be made on a [***] basis and shall be made at the rate of exchange
[***].

10) INCOME TAX WITHHOLDING. Where any sum due to be paid to Pieris/Zydus (as
applicable) hereunder shall be subject to any withholding tax, the Parties shall
use all reasonable efforts to do all such acts and things and to sign all such
documents as will enable them to take advantage of any applicable taxation
treaty or agreement. In the event there is no applicable taxation treaty or
agreement, or if an applicable taxation treaty or agreement reduces but does not
eliminate such withholding or similar tax, the concerned Party shall pay such
withholding or similar tax to the appropriate Governmental Authority, deduct the
amount paid from the amount due to Pieris/Zydus (as applicable), and secure and
send to Pieris/Zydus (as applicable) the best available evidence of such payment
sufficient to enable Pieris/Zydus (as applicable) to obtain a deduction for such
withheld taxes or obtain a refund thereof including, without limitation, when
received, a copy of the official tax receipt evidencing payment of such tax to
the appropriate taxing authority.

 

Portions of the exhibit, indicated by the mark “[***],” were omitted and have
been filed separately with the Securities and Exchange Commission pursuant to
the Registrant’s application requesting confidential treatment pursuant to Rule
24b-2 of the Securities Exchange Act of 1934, as amended.

 

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ARTICLE 8

CONFIDENTIALITY

1) CONFIDENTIALITY

Except to the extent expressly authorized by this Agreement or otherwise agreed
in writing by the Parties, the Recipient agrees that, for the Term and for [***]
years thereafter, it shall keep confidential and shall not publish or otherwise
disclose and shall not use for any purpose other than as provided for in this
Agreement (which includes the exercise of any rights or the performance of any
obligations hereunder) any Confidential Information furnished to it by the
Discloser pursuant to this Agreement except for that portion of such Information
that the Recipient can demonstrate by competent written proof:

(a) was already known to the Recipient or any of its Affiliates, other than
under an obligation of confidentiality to the Disclosing Party, at the time of
disclosure by the Discloser;

(b) was generally available to the public or otherwise part of the public domain
at the time of its disclosure to the Recipient;

(c) became generally available to the public or otherwise part of the public
domain after its disclosure and other than through any act or omission of the
Recipient in breach of this Agreement;

(d) is subsequently disclosed to the Recipient or any of its Affiliates by a
Third Party without obligations of confidentiality to the Discloser with respect
thereto; or

(e) is subsequently independently discovered or developed by the Recipient or
its Affiliate without the aid, application, or use of Confidential Information
of the Discloser.

2) AUTHORIZED DISCLOSURE

Each Party may disclose Confidential Information belonging to the other Party to
the extent such disclosure is reasonably necessary in the following situations:

(a) filing or prosecuting Patents in accordance with Article 10;

(b) subject to Section 8(3), regulatory filings and other filings with
Governmental Authorities (including Regulatory Authorities), including filings
with the FDA, as necessary for the Development or Commercialization, as required
in connection with any filing, application or request for Regulatory Approval;
provided, however, that reasonable measures will be taken to assure confidential
treatment of such information;

(c) prosecuting or defending litigation;

(d) complying with Applicable Law, including regulations promulgated by
securities exchanges;

(e) subject to Section 8(3), complying with Applicable Laws, including
regulations promulgated by securities exchanges;

(f) disclosure to its Affiliates, Authorized Persons, independent contractors,
licensors and any Sublicensees (including prospective Sublicensees), but only on
a need-to-know basis and solely in connection with the performance of this
Agreement, provided that each aforementioned disclosee must be bound by
obligations of confidentiality and non-use at least as equivalent in scope as
and no less restrictive than those set forth in this Article 8 prior to any such
disclosure;

(g) disclosure of the material terms of this Agreement to any bona fide
potential or actual investor, stockholder, investment banker, acquirer, merger
partner or other potential or actual financial partner; provided that each
aforementioned disclosee must be bound by obligations of confidentiality and
non-use at least as equivalent in scope as and no less restrictive than those
set forth in this Article 8 prior to any such disclosure;

 

Portions of the exhibit, indicated by the mark “[***],” were omitted and have
been filed separately with the Securities and Exchange Commission pursuant to
the Registrant’s application requesting confidential treatment pursuant to Rule
24b-2 of the Securities Exchange Act of 1934, as amended.

 

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(h) disclosure of the stage of Development of Products under this Agreement to
any bona fide potential or actual investor, stockholder, investment banker,
acquirer, merger partner or other potential or actual financial partner;
provided that each aforementioned disclosee must be bound by obligations of
confidentiality and non-use at least as equivalent in scope as and no less
restrictive than those set forth in this Article 8 prior to any such disclosure;

(i) disclosure of any blinded data generated under this Agreement to any bona
fide potential or actual investor, stockholder, investment banker, acquirer,
merger partner or other potential or actual financial partner; provided that
each aforementioned disclosee must be bound by obligations of confidentiality
and non-use at least as equivalent in scope as and no less restrictive than
those set forth in this Article 8 prior to any such disclosure; and

(j) disclosure pursuant to Section 5(3)).

Notwithstanding the foregoing, in the event a Party is required to make a
disclosure of the other Party’s Confidential Information pursuant to Sections
8(2)(a), 8(2)(b), 8(2)(c) or 8(2)(d), it will, except where impracticable, give
reasonable advance notice to the other Party of such disclosure and use
reasonable efforts to secure confidential treatment of such information. In any
event, the Parties agree to take all reasonable action to avoid disclosure of
Confidential Information hereunder.

3) PUBLICITY; TERMS OF AGREEMENT

(a) The Parties agree that the material terms of this Agreement are the
Confidential Information of both Parties, only subject to the special authorized
disclosure provisions set forth in Section 8(2) and this Section 8(3). The
Parties agree to make a joint public announcement of the execution of this
Agreement substantially in the form of the press release attached as Schedule 6
on or after the Effective Date.

(b) After issuance of such joint press release, if either Party desires to make
a public announcement concerning the material terms of this Agreement, such
Party shall give reasonable prior advance notice of the proposed text of such
announcement to the other Party for its prior review and approval (except as
otherwise provided herein), such approval not to be unreasonably withheld in
light of the intent and purposes of this Agreement, except that in the case of a
press release or governmental filing required by Applicable Laws (where
reasonably advised by the disclosing Party’s counsel), the disclosing Party
shall provide the other Party with such advance notice as it reasonably can and
shall not be required to obtain approval therefor. A Party commenting on such a
proposed press release shall provide its comments, if any, within [***] days (or
within three (3) business days in the event that one Party (or its Affiliate) is
a public reporting company) after receiving the press release for review and the
other Party shall give good faith consideration to same. Neither Party shall be
required to seek the permission of the other Party to repeat any information
regarding the terms of this Agreement that have previously been publicly
disclosed by such Party, or by the other Party, in accordance with this
Section 8(3). For clarity, [***].

(c) The Parties acknowledge that either or both Parties may be obligated to file
under Applicable Laws a copy of this Agreement with the Government Authorities
of country where each Party is domiciled or has a public listing. Each Party
shall be entitled to make such a required filing, provided that it requests
confidential treatment of at least the financial terms and sensitive technical
terms hereof and thereof to the extent such confidential treatment is reasonably
available to such Party. In the event of any such filing, each Party will
provide the other Party with a copy of this Agreement marked to show provisions
for which such Party intends to seek confidential treatment not less than five
(5) Business Days prior to such filing (and any revisions to such portions of
the proposed filing a reasonable time prior

 

Portions of the exhibit, indicated by the mark “[***],” were omitted and have
been filed separately with the Securities and Exchange Commission pursuant to
the Registrant’s application requesting confidential treatment pursuant to Rule
24b-2 of the Securities Exchange Act of 1934, as amended.

 

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to the filing thereof), and shall reasonably consider the other Party’s comments
thereon to the extent consistent with the legal requirements, with respect to
the filing Party, governing disclosure of material agreements and material
information that must be publicly filed, and shall only disclose Confidential
Information which it is advised by counsel or the applicable Governmental
Authority is legally required to be disclosed. No such notice shall be required
under this Section 8(3)(c) if the substance of the description of or reference
to this Agreement contained in the proposed filing has been included in any
previous filing made by either Party hereunder or otherwise approved by the
other Party.

(d) Each Party shall require each of its Affiliates and private investors to
which Confidential Information of the other Party is disclosed as permitted
hereunder to comply with the covenants and restrictions set forth in this
Article 8 as if each such Affiliate and each such investor were a Party to this
Agreement and shall be fully responsible for any breach of such covenants and
restrictions by any such Affiliate or investor.

4) PUBLICATIONS

(a) Neither Party shall publicly present or publish results of studies carried
out under this Agreement (each such presentation or publication a “Publication”)
without the opportunity for prior review by the other Party, except to the
extent otherwise required by Applicable Law, in which case Section 8(3) shall
apply with respect to disclosures required by the SEC and/or for regulatory
filings. The submitting Party shall provide the other Party the opportunity to
review any proposed Publication at least [***] days prior to the earlier of its
presentation or intended submission for publication. The submitting Party
agrees, upon request by the other Party, not to submit or present any
Publication until the other Party has had [***] days to comment on any material
in such Publication. The submitting Party shall consider the comments of the
other Party in good faith, but will retain the sole authority to submit the
manuscript for Publication; provided that the submitting Party agrees to delay
such Publication as necessary to enable the Parties to file a Patent if such
Publication might adversely affect such Patent. The submitting Party shall
provide the other Party a copy of the Publication at the time of the submission
or presentation. Notwithstanding the foregoing, Zydus shall not have the right
to publish or present Pieris’ Confidential Information without Pieris’ prior
written consent, and Pieris shall not have the right to publish or present
Zydus’ Confidential Information without Zydus’ prior written consent. Each Party
agrees to acknowledge the contributions of the other Party, and the employees of
the other Party, in all publications as scientifically appropriate.

(b) Nothing contained in this Section 8(4) shall prohibit the inclusion of
information in a patent application claiming, and in furtherance of, the
manufacture, use, sale or formulation of a Product, provided that the non-filing
Party is given a reasonable opportunity to review, comment upon and/or approve
the information to be included prior to submission of such patent application,
where and to the extent required by Article 10 hereof.

(c) Notwithstanding Article 10, the Parties recognize that independent
investigators have been engaged, and will be engaged in the future, to conduct
clinical trials of Products. The Parties recognize that such investigators
operate in an academic environment and may release information regarding such
studies in a manner consistent with academic standards; provided that each Party
will use reasonable efforts (e.g. through contractual relationship with said
investigators) to prevent publication prior to the filing of relevant patent
applications and to ensure that no Confidential Information of either Party is
disclosed.

5) TERMINATION OF PRIOR CDA AND PRIOR MTA.

This Agreement terminates, as of the Effective Date, the Prior CDA as well as
the Prior MTA. All Information exchanged between the Parties under the Prior CDA
as well as the Prior MTA and/or obtained by either Party under the Prior MTA
shall be deemed Confidential Information of the corresponding Party under this
Agreement and shall be subject to the terms of this Article 8.

 

Portions of the exhibit, indicated by the mark “[***],” were omitted and have
been filed separately with the Securities and Exchange Commission pursuant to
the Registrant’s application requesting confidential treatment pursuant to Rule
24b-2 of the Securities Exchange Act of 1934, as amended.

 

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ARTICLE 9

WARRANTIES AND INDEMNITIES

1) PIERIS WARRANTIES

Pieris warrants, represents and undertakes to Zydus that, to the best of Pieris’
knowledge, on and before the Effective Date:

 

  I. It is a corporation duly organized, validly existing, and in good standing
under the laws of the jurisdiction in which it is incorporated, and has full
corporate power and authority and the legal right to own and operate its
property and assets and to carry on its business as it is now being conducted
and as contemplated in this Agreement, including the right to grant the licenses
granted by it hereunder;

 

  II. It has the full corporate power and authority and the legal right to enter
into this Agreement and perform its obligations hereunder. It has taken all
necessary corporate action on its part required to authorize the execution and
delivery of this Agreement and the performance of its obligations hereunder.
This Agreement has been duly executed and delivered on behalf of Pieris, and
constitutes a legal, valid, and binding obligation of Pieris that is enforceable
against it in accordance with its terms;

 

  III. It is not a party to any agreement, outstanding order, judgment or decree
of any court or Governmental Authority that would prevent it from granting the
rights granted to Zydus under this Agreement or performing its obligations under
this Agreement;

 

  IV. It has not, and will not, after the Effective Date and during the Term,
grant any right to any Third Party that would conflict with the rights granted
to Zydus hereunder;

 

  V. Pieris is [***].

 

  VI. Schedule 1 contains a complete listing of all Pieris Patents [***] as of
the Effective Date;

 

  VII. Pieris has sufficient legal and/or beneficial title, ownership or license
under the Pieris Rights to grant the licenses to Zydus as purported to be
granted pursuant to this Agreement; and

 

  VIII. There are no written allegations or pending proceedings which assert
that the Development, use or sale of a Product infringes or will infringe Third
Party rights or which challenge the validity or enforceability of the Pieris
Patents.

2) ZYDUS WARRANTIES

Zydus warrants, represents and undertakes to Pieris that, to the best of Zydus’
knowledge, as of the Effective Date:

 

  I. It is a company or corporation duly organized, validly existing, and in
good standing under the laws of the jurisdiction in which it is incorporated,
and has full corporate power and authority and the legal right to own and
operate its property and assets and to carry on its business as it is now being
conducted and as contemplated in this Agreement, including the right to grant
the licenses granted by it hereunder;

 

  II.

It has the full corporate power and authority and the legal right to enter into
this Agreement and perform its obligations hereunder. It has taken all necessary
corporate action on its part required to

 

Portions of the exhibit, indicated by the mark “[***],” were omitted and have
been filed separately with the Securities and Exchange Commission pursuant to
the Registrant’s application requesting confidential treatment pursuant to Rule
24b-2 of the Securities Exchange Act of 1934, as amended.

 

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  authorize the execution and delivery of this Agreement and the performance of
its obligations hereunder. This Agreement has been duly executed and delivered
on behalf of Zydus, and constitutes a legal, valid, and binding obligation of
Zydus that is enforceable against it in accordance with its terms;

 

  III. It is not a party to any agreement, outstanding order, judgment or decree
of any court or Governmental Authority that would prevent it from granting the
rights granted to Pieris under this Agreement or performing its obligations
under this Agreement;

 

  IV. It has not, and will not, after the Effective Date and during the Term,
grant any right to any Third Party that would conflict with the rights granted
to Pieris hereunder;

 

  V. it is the exclusive legal and beneficial owner of all rights, title and
interest in the Zydus Rights, and there are no liens, encumbrances or other
charges over any of them;

 

  VI. Zydus [***]upon the terms and conditions of this Agreement [***] under
this Agreement;

 

  VII. Zydus will perform its obligations hereunder with reasonable care and
skill;

 

  VIII. there are no written allegations or claims that Zydus is not entitled to
the Zydus Rights;

 

  IX. it shall make a full and complete disclosure to Pieris of all Zydus
relationships with Third Parties which may affect Pieris’ complete exercise of
rights under this Agreement;

 

  X. in the event of Zydus becoming aware of any information which might affect
its ability to give the warranties and representations set out above it shall
promptly notify Pieris.

3) MUTUAL INDEMNIFICATION

a) ZYDUS’ OBLIGATION. Zydus will defend, indemnify, and hold harmless Pieris
from and against any and all liabilities, damages, losses, penalties, fines,
costs, interest, and expenses, including, without limitation, reasonable
attorneys’ fees (collectively, “Damages”), direct or indirect, arising from or
occurring as a result of (i) a Third Party’s claim, action, suit, judgment, or
settlement against Pieris (collectively, “Claims”, and each a “Claim”) arising
out of the Development, preclinical and clinical testing, manufacture,
distribution, Commercialization and/or use (including but not limited to product
liability claims and claims for infringement of any Third Party intellectual
property rights) of any Product, done by Zydus, its Affiliates or Sublicensees,
or (ii) any breach by Zydus of an obligation, agreement, condition, covenant,
representation, or warranty of Zydus under this Agreement; provided, however,
that Zydus will not be obligated to indemnify or hold harmless Pieris from
Damages under (i) and (ii) above to the extent that such Damages have resulted
from (i) the grossly negligent (or more culpable e.g. willful) act or omission
of Pieris or (ii) any breach by Pieris of an obligation, agreement, condition,
covenant, representation, or warranty of Pieris under this Agreement or
(iii) Pieris’ Rights or Joint Arising IP.

 

  b)

PIERIS’ OBLIGATION. Pieris will defend, indemnify, and hold harmless Zydus from
and against any and all liabilities, damages, losses, penalties, fines, costs,
interest, and expenses, including, without limitation, reasonable attorneys’
fees (collectively, “Damages”), direct or indirect, arising from or occurring as
a result of (i) a Third Party’s claim, action, suit, judgment, or settlement
against Zydus (collectively, “Claims” and each a “Claim”)) arising out of the
Development, preclinical and clinical testing, manufacture, distribution,
Commercialization and/or use (including but not limited to product liability
claims and claims for infringement of any Third Party intellectual property
rights) of any Product, done by Pieris, its Affiliates or Sublicensees, or
(ii) any breach by Pieris of an obligation, agreement, condition, covenant,
representation, or warranty of Pieris

 

Portions of the exhibit, indicated by the mark “[***],” were omitted and have
been filed separately with the Securities and Exchange Commission pursuant to
the Registrant’s application requesting confidential treatment pursuant to Rule
24b-2 of the Securities Exchange Act of 1934, as amended.

 

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  under this Agreement; provided, however, that Pieris will not be obligated to
indemnify or hold harmless Zydus from Damages under (i) and (ii) above to the
extent that such Damages have resulted from (i) the grossly negligent (or more
culpable e.g. willful) act or omission of Zydus or (ii) any breach by Zydus of
an obligation, agreement, condition, covenant, representation, or warranty of
Zydus under this Agreement or (iii) Zydus’ Rights or Joint Arising IP.

 

  c) INDEMNIFICATION PROCEDURE. Notwithstanding foregoing, Section 9(3)(a) or
Section 9(3)(b) will not apply, unless the following (i), (ii) (iii) and
(iv) are all satisfied: (i) when the respective Party (the “Indemnitee”) seeks
indemnification from the other Party (the “Indemnitor”) with respect to any
Claim, the Indemnitee shall provide written notice of the Claim to the
Indemnitor as soon as reasonably practicable upon becoming aware of the Claim;
(ii) the Indemnitor shall be entitled, but shall not be obligated, to
participate in or assume the defence of the Claim; provided, however, that if
the defence is assumed, the Indemnitor shall, through legal representative
chosen by it at its cost, act reasonably, and the Indemnitee shall also have the
right, but not the obligation, to employ separate legal representative, in which
event the fees and expenses of such second legal representative shall be borne
by the Indemnitee; (iii) the Indemnitee shall reasonably cooperate with the
Indemnitor and its legal representative in the investigation or defence of such
Claim; (iv) no Claim may be settled by the Indemnitor without the prior written
consent of the Indemnitee.

4) LIMITATION OF LIABILITY.

NEITHER PARTY WILL BE LIABLE TO THE OTHER PARTY FOR INDIRECT, INCIDENTAL,
CONSEQUENTIAL, OR SPECIAL DAMAGES INCLUDING, BUT NOT LIMITED TO, LOST PROFITS
ARISING FROM OR RELATING TO ANY BREACH OF THIS AGREEMENT, REGARDLESS OF ANY
NOTICE OF THE POSSIBILITY OF SUCH DAMAGES. HOWEVER, NOTHING IN THIS SECTION IS
INTENDED TO LIMIT OR RESTRICT THE INDEMNIFICATION RIGHTS OR OBLIGATIONS OF
EITHER PARTY HEREUNDER.

ARTICLE 10

INTELLECTUAL PROPERTY

1) OBTAIN AND MAINTAIN THE PATENTS

 

  a) Pieris shall, at its own cost and expense and within its sole discretion,
file, maintain and prosecute (i) in the Territories, the Patents claiming the
Pieris Rights, the Pieris Arising IP and the Pieris Acquired IP, and (ii) in the
Pieris Territory only, the Joint Arising IP. Pieris shall [***].

 

  b) Zydus shall, at its own cost and expense and within its sole discretion,
file, maintain and prosecute (i) in the Territory, the Patents claiming the
Zydus Rights, the Zydus Arising IP and the Zydus Acquired IP, and (ii) in the
Zydus Territory only, the Joint Arising IP. Zydus shall not [***].

 

  c) Notwithstanding foregoing Sections 10(1)(a) and (b), for said Patents, if
either Party (the “Ceasing Party”) wishes (i) not to file an application in any
one of the following jurisdictions: [***], (ii) abandon any such patent
application or (iii) not to maintain any such Patent in any one of said
jurisdictions , it shall give prior written notice to the other Party at least
[***] days before any relevant deadline, then the other Party has the right,
exercisable within [***] days exercisable within [***] days of such notice, to
take an assignment of the patent application or patent and, at its own expense,
control the further prosecution the patent application or maintenance of such
Patent. In the event such right is exercised by the other Party, the Ceasing
Party shall effectuate said assignment and provide to the other Party all
information necessary for the further prosecution or maintenance. For the
avoidance of doubt, any such Patent is part of the other Party’s Acquired IP.

 

Portions of the exhibit, indicated by the mark “[***],” were omitted and have
been filed separately with the Securities and Exchange Commission pursuant to
the Registrant’s application requesting confidential treatment pursuant to Rule
24b-2 of the Securities Exchange Act of 1934, as amended.

 

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  d) Notwithstanding foregoing Sections 10(1)(a) and (b), with respect to the
filing, maintaining and prosecution of (i) any of Joint Arising IP as well as
(ii) any of Pieris Arising IP and Zydus Arising IP, before any action taken by
either Party, the Parties will confer first and try to agree on a strategy for
drafting and/or prosecuting the respective application. In this regard, each of
Zydus and Pieris shall keep the other Party fully informed as to the status of
preparation, prosecution and maintenance of the respective application or
patent, including, without limitation, (x) providing the other Party the
opportunity to fully review and comment on (i) any patent application at least
[***] days of the respective filing date and on (ii) any documents which will be
filed in any patent office at least [***] days of any relevant deadline, and
(y) providing the other copies of any substantive documents that such Party
receives from such patent office at least [***] days after receipt, including
notice of all interferences, reissues, re-examinations, oppositions or requests
for patent term extensions. The other Party shall provide feedback at least
[***] days of the respective filing date or the relevant deadline. If the
Parties could not agree on such a strategy in good faith upon [***] days of the
relevant deadline, Pieris will have the final decision-making authority
regarding the filing, maintaining and prosecution of any of (i) [***] and
(ii) [***];, while Zydus will have the final decision-making authority regarding
the filing, maintaining and prosecution of any of (i) [***] and (ii) [***];
provided, however, that, if [***], [***]. Zydus and Pieris shall reasonably
cooperate with and assist each other at their own respective expense in
connection with activities referred under this Section 10(1)(d), at the other
Party’s request.

2) INFRINGEMENT OF THE PATENTS/INTELLECTUAL PROPERTY RIGHTS

 

  a) During the Term, each Party shall inform the other Party promptly if it
becomes aware of any infringement or potential infringement in the Territory of
any of the Pieris Rights, the Pieris Arising IP, the Pieris Acquired IP, the
Zydus Rights, the Zydus Arising IP, the Zydus Acquired IP or the Joint Arising
IP, and the Parties shall consult with each other to decide the best way to
respond to such infringement.

 

  b) During the Term, if the Parties fail to agree on a joint program of action,
including how the costs of any such action are to be borne and how any damages
or other sums received from such action are to be distributed, then the Party
(the “Enforcing Party”) in whose Territory such infringement has taken place
shall be entitled to take action against the applicable Third Party at its sole
expense and the other Party (the “Abstaining Party”) hereby agrees to be joined
by the Enforcing Party in any legal proceeding where the Applicable Law requires
the Abstaining Party’s participation for the Enforcing Party to initiate and
maintain such proceeding. In this regard, the Enforcing Party shall have control
over such proceeding and the Abstaining Party shall reasonably cooperate with
the Enforcing Party and defer to the Enforcing Party’s decisions. The damages or
other sums received from such action (the “Receipts”) shall be distributed as
follows: After deducting its own documented legal costs and reimbursing the
other Party for any reasonable expenses incurred in assisting it in such action,
the enforcing Party shall pay [***] of all remaining Receipts to the other
Party, and shall keep the balance of the remaining Receipts for itself.
Notwithstanding the foregoing, during the Term, only the Continuing Party under
Section 4(4) can take action against the applicable Third Party in the
Territories,

3) INFRINGEMENT OF THIRD PARTY RIGHTS

 

  a) If any warning letter or other notice of infringement is received by a
Party, or legal suit or other action is brought against such Party, alleging
infringement of Third Party Rights in the practice of its Licence rights
hereunder or in the manufacture, use or sale of the Product or use of any
Patents, such Party shall promptly provide full details to the other Party, and
the Parties shall discuss the best way to respond. The other Party, however,
shall not be relieved of any of its obligations for indemnification, if any,
provided for hereinabove, for such infringement.

 

Portions of the exhibit, indicated by the mark “[***],” were omitted and have
been filed separately with the Securities and Exchange Commission pursuant to
the Registrant’s application requesting confidential treatment pursuant to Rule
24b-2 of the Securities Exchange Act of 1934, as amended.

 

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  b) Zydus shall have the right but not the obligation to defend any such suit
in the Zydus Territory, and Pieris shall have the right but not the obligation
to defend any such suit in the Pieris Territory. The defending Party shall have
the right to settle with such Third Party, provided that if any action or
proposed settlement involves the making of any statement, express or implied,
concerning the validity of any Patent Controlled by the other Party, the consent
of the other Party must be obtained before taking such action or making such
settlement.

 

  c) Zydus shall be entitled to deduct, from royalties payable to Pieris in any
Calendar Year under this Agreement, up to [***] of any sums paid to Third
Parties (including, without limitation, damages, payments in settlement of
litigation and royalty payments) during the same Calendar Year, based on any
alleged or actual infringement of Third Party rights as the result of Zydus’
practice of the Pieris Rights pursuant to this Agreement; provided, however,
that no such deduction shall exceed [***] of the royalties otherwise payable to
Pieris during such Calendar Year. Pieris shall be entitled to deduct, from
payments payable to Zydus in any Calendar Year under this Agreement, up to [***]
of any sums paid to Third Parties (including, without limitation, damages,
payments in settlement of litigation and royalty payments) during the same
Calendar Year, based on any alleged or actual infringement of Third Party rights
as the result of Pieris’ practice of the Zydus Rights pursuant to this
Agreement; provided, however, that no such deduction shall exceed [***] of the
payments otherwise payable to Zydus during such Calendar Year.

ARTICLE 11

TERM AND TERMINATION

1) TERM

This Agreement shall come into force on the Effective Date and, subject to the
terms and conditions herein contained, will remain in effect until [***] (the
“Term”). [***].

2) TERMINATION

a) Without prejudice to any other right or remedy it may have, either Party may
terminate this Agreement at any time by notice in writing to the other Party,
upon or after the occurrence of any one of the following:

 

  i. Breach of any material provision of this Agreement by the other Party and
if the breaching Party has not cured such breach within the [***] day period
following written notice of termination by the non-breaching Party or breach of
any provision of this Agreement by the other Party and if the breaching Party
has not cured such breach within the [***] day period following written notice
of termination by the non-breaching Party; provided, however, that to the extent
there is a Dispute as to the existence of such a breach, then prior to any
termination under this Section 11(2)(a)(i), the Parties shall resolve such
Dispute in accordance with Article 12; and

 

  ii.

Insolvency or passing of a winding-up order or going into liquidation of the
other Party, or if the other Party ceases to otherwise trade or is unable to pay
its debts as and when they fall due or is otherwise subject to any insolvency or
winding-up procedure; or a petition is presented for its winding up or it enters
into a composition with its creditors; or has filed against it a petition in
bankruptcy; makes any assignment for the benefit of creditors; has

 

Portions of the exhibit, indicated by the mark “[***],” were omitted and have
been filed separately with the Securities and Exchange Commission pursuant to
the Registrant’s application requesting confidential treatment pursuant to Rule
24b-2 of the Securities Exchange Act of 1934, as amended.

 

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appointed a receiver of its property or a substantial portion thereof; or takes
advantage of any other law or procedure for the protection of creditors; or the
majority of the Party‘s shares are transferred to Third Parties.

Said notice shall take effect on the date as specified in the notice as long as
such date is after the occurrence of any of the (i) or (ii) above. For the
avoidance of doubt, the non-breach Party is entitled to cease performance of its
obligations during the respective period referred above in Section 11(2)(a)(i)
until the breaching Party has cured the breach.

b) Either Party shall be permitted to terminate this Agreement with respect to a
Product after [***], by providing one [***] days’ prior written notice to the
other Party. Once this Agreement is so terminated pursuant to this
Section 11(2)(b), either Party shall be solely responsible for any expenses in
relation to its activities and/or responsibilities under this Agreement.

3) EFFECTS OF TERMINATION

 

  a) Termination of this Agreement for any reason shall not release either Party
hereto from any of its outstanding financial obligations hereunder or any
liability which, at the time of such termination, has already accrued to the
other Party or which is attributable to a period prior to such termination, nor
preclude either Party from pursuing all rights and remedies it may have
hereunder or at law or in equity with respect to any breach of this Agreement.

 

  b) In the event of termination by Pieris pursuant to Section 11(2)(a)(i) or
(ii), Pieris shall retain and/or have the exclusive rights to (i) all data
generated until the effective date of such termination as well as the Arising IP
relating thereto (Pieris Arising IP, Zydus Arising IP and Joint Arising IP) and
(ii) to continue the Development and/or Commercialization of Products, whether
directly or indirectly (e.g., through a Sublicensee), in a regulatory
jurisdiction (e.g. a country or geographical region) within the Territories,
without any further financial obligation to Zydus. Zydus agrees to execute one
or more assignments necessary to effectuate such grant of rights to Pieris free
of charge. Further, the License granted by Pieris to Zydus hereunder shall
terminate concurrently, and the License granted by Zydus to Pieris hereunder
shall survive such termination and remain in effect, subject to the terms and
conditions of this Agreement applicable thereto.

 

  c) In the event of termination by Zydus pursuant to Section 11(2)(a)(i) or
(ii), Zydus shall retain and/or have the exclusive rights to all data generated
until the effective date of such termination as well as the Arising IP relating
thereto (Pieris Arising IP, Zydus Arising IP and Joint Arising IP) and (ii) to
continue the Development and/or Commercialization of Products, whether directly
or indirectly (e.g., through a Sublicensee), in a regulatory jurisdiction (e.g.
a country or geographical region) within the Territories, without any further
financial obligation to Pieris. Pieris agrees to execute such as one or more
assignments necessary to effectuate such grant of rights to Zydus free of
charge. Further, the License granted by Zydus to Pieris hereunder shall
terminate concurrently, and the License granted by Pieris to Zydus hereunder
shall survive such termination and remain in effect, subject to the terms and
conditions of this Agreement applicable thereto.

 

  d) In the event of termination by one Party pursuant to Section 11(2)(b), in
term of the Product so terminated, each Party shall retain and/or have the
exclusive rights to its Arising IP and the other Party agrees to execute one or
more assignments necessary to effectuate such grant of rights to the
first-mentioned Party free of charge. The Parties will handle Joint Arising IP
pursuant to Article 10. Further, the License granted by one Party to the other
Party hereunder shall terminate concurrently, except that the non-exclusive
licenses granted under Section 2(1)(a)(3) and Section 2(1)(b)(3) hereunder shall
survive such termination and remain in effect, subject to the terms and
conditions of this Agreement applicable thereto. Furthermore, the Parties hereby
agree to keep the data in confidence in accordance with Article 8 for the Term
and [***] years thereafter.

 

Portions of the exhibit, indicated by the mark “[***],” were omitted and have
been filed separately with the Securities and Exchange Commission pursuant to
the Registrant’s application requesting confidential treatment pursuant to Rule
24b-2 of the Securities Exchange Act of 1934, as amended.

 

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4) SURVIVAL

The following provisions shall survive the expiration or termination of this
Agreement for any reason: Articles 1 and 7 to 13.

ARTICLE 12

GOVERNING LAW [***]

This Agreement shall be governed by and construed in accordance with the
then-current substantive law of the state of New York, United States, without
regard to the conflict of laws principles thereof. The Parties further agree
that any Dispute that cannot be resolved by negotiation between the Parties
shall [***].

ARTICLE 13

MISCELLANEOUS

1) FORCE MAJEURE

Neither Party will be held liable or responsible to the other Party nor be
deemed to have defaulted under or breached the Agreement for failure or delay in
fulfilling or performing any term of the Agreement when such failure or delay is
caused by or results from causes beyond such Party’s reasonable control
including, without limitation, war, fire, accident or other casualty, labor
disturbance, strike or other industrial destruction, riots, revolt, acts of war
(whether war be declared or not), insurrections, riots, civil commotions, or
earthquakes, flood or other natural disasters or Acts of God or the public
enemy, (collectively, “Force Majeure”), provided that, however, the Party
affected will notify the other Party of such Force Majeure circumstances as soon
as reasonably practicable and will make every reasonable effort to mitigate the
effects of such Force Majeure circumstances.

2) FURTHER ASSURANCES

The Parties intend that this Agreement contain all consents, licenses and
authorizations from one Party to the other necessary to enable each Party to
perform its obligations hereunder. In the event any further such consents,
licenses or authorizations are necessary, each Party agrees to take such further
actions and execute such further agreements as may be reasonably necessary to
carry out the intent and purposes of this Agreement.

3) SEVERABILITY

In the event any one or more of the provisions contained in this Agreement
should be held invalid, illegal or unenforceable in any respect, the validity,
legality and enforceability of the remaining provisions contained herein will
not in any way be affected or impaired thereby, unless the absence of the
invalidated provision(s) adversely affect the intent and purposes of this
Agreement. The Parties will in such an instance use their diligent efforts to
replace the invalid, illegal or unenforceable provision(s) with valid, legal and
enforceable provision(s) which, insofar as practicable, maintains the intent and
purposes of this Agreement under this Agreement.

 

Portions of the exhibit, indicated by the mark “[***],” were omitted and have
been filed separately with the Securities and Exchange Commission pursuant to
the Registrant’s application requesting confidential treatment pursuant to Rule
24b-2 of the Securities Exchange Act of 1934, as amended.

 

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4) NOTICES

All notices which are required or permitted hereunder will be in writing and
sufficient if delivered personally, sent by facsimile (and promptly confirmed by
personal delivery, registered or certified mail or overnight courier) or sent by
nationally-recognized overnight courier addressed as follows:

 

if to Pieris, to:    Pieris, AG    Lise-Meitner-Straße 30, 85354    Freising,
Germany    Attention: CEO    Fax No: 49 (0) 8161 14 11 444 if to Zydus, to:   
Zydus Research Centre    Sarkhej-BavlaN.H. No. 8A    Moraiya, Ahmedabad - 382210
   Gujarat, India    Attn: Dr. Sanjeev Kumar    Sr. Vice President,
Biotechnology    Ph:     +91-2717-665555 CC to    Cadila Healthcare Limited   
Zydus Tower    Satellite Cross Roads    Ahmedabad -380 015    India   
Attention: Mr. Arun Parikh    Fax No.: +91-79-26868144

or to such other address as the Party to whom notice is to be given may have
furnished to the other Party in writing in accordance herewith. Any such notice
will be deemed to have been given (i) on the same business day if personally
delivered or sent by facsimile or (ii) on the third (3rd) business day after
dispatch if sent by nationally-recognized overnight courier.

5) ENTIRE AGREEMENT

This Agreement contains the entire understanding of the Parties with respect to
License, Research, Development, manufacture and Commercialization of a Product
as well as related financial obligations on either Party. All express or implied
agreements and understandings, either oral or written, heretofore made by the
Parties on the same subject matter, are expressly superseded by this Agreement.
The Agreement may be amended, or any term hereof modified, only by a written
instrument duly executed by both Parties hereto.

6) HEADINGS

The captions to the several Articles and Sections hereof are not a part of the
Agreement nor affect the interpretation of any of its provisions, but are merely
a convenience to assist in locating and reading the several Articles and
Sections hereof.

7) INDEPENDENT CONTRACTORS

It is expressly agreed that Pieris and Zydus will be independent contractors and
that the relationship between the two Parties will not constitute a partnership,
joint venture or agency. Neither Pieris nor Zydus will have the ability to
control the other Party or the authority to make any statements, representations
or commitments of any kind, or to take any action, which will be binding on the
other, without the prior written consent of the other Party.

 

Portions of the exhibit, indicated by the mark “[***],” were omitted and have
been filed separately with the Securities and Exchange Commission pursuant to
the Registrant’s application requesting confidential treatment pursuant to Rule
24b-2 of the Securities Exchange Act of 1934, as amended.

 

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8) ASSIGNMENT

This Agreement may not be assigned or otherwise transferred, nor, except as
expressly provided hereunder, may any right or obligation hereunder be assigned
or transferred by either Party without the prior written consent of the other
Party; provided, however, that a Party may make such an assignment or transfer
without the other Party’s consent to any Affiliate of such Party, provided that
(i) such transfer shall not adversely affect the other Party’s rights and
obligations under this Agreement and that such assigning/transferring Party
remains jointly and severally liable with such Affiliate for the performance of
this Agreement and/or the assigned obligations, and (ii) that the assigning
Party provides written notice to the other Party of such assignment and the
assignee shall have agreed in writing to be bound (or is otherwise required by
operation of Applicable Laws to be bound) in the same manner as such assigning
Party hereunder. Notwithstanding the foregoing, either Party shall have the
right to assign this Agreement to a Third Party successor-in-interest or
purchaser of all or substantially all of the business or assets of such Party to
which this Agreement relates (the “Third Party Assignee”), whether in a merger,
combination, reorganization, sale of stock, sale of assets or other transaction;
provided, however, that the Third Party Assignee expressly obligates itself in a
written instrument delivered to the non-assigning Party, on or before the date
of closing such merger, combination, reorganization, sale of stock, sale of
assets or other transaction, to fully perform all of the obligations of the
assigning Party under this Agreement. In addition, either Party may assign its
right to receive proceeds under this Agreement or grant a security interest in
such right to receive proceeds under this Agreement to one or more Third Parties
providing financing to such Party pursuant to the terms of a security or other
agreement related to such financing (i.e., for purposes of a royalty financing
arrangement). The rights and obligations of the Parties under this Agreement
shall be binding upon and inure to the benefit of the successors and permitted
assigns of the Parties. Any attempted assignment not in accordance with this
Section 13(8) will be void.

9) WAIVER

The waiver by either Party hereto of any right hereunder, or any failure to
perform by the other Party, or any breach by the other Party will not be deemed
a waiver of any other right hereunder or of any other breach or failure by said
other Party whether of a similar nature or otherwise.

10) NO THIRD PARTY BENEFICIARIES

Except for as referred in Section 13(8), this Agreement is neither expressly nor
impliedly made for the benefit of any Person other than the Parties.

11) COUNTERPARTS

The Agreement may be executed in two or more counterparts, each of which will be
deemed an original, but all of which together will constitute one and the same
instrument. The counterparts of this Agreement may be executed by one Party with
electronic signature and delivered through facsimile or email to the other Party
and the receiving Party may rely on the receipt of such counterpart so executed
and delivered by as if the original had been received.

12) WAIVER OF RULE OF CONSTRUCTION

Each Party has had the opportunity to consult with counsel in connection with
the review, drafting and negotiation of this Agreement. Accordingly, the rule of
construction that any ambiguity in this Agreement will be construed against the
drafting Party will not apply.

 

Portions of the exhibit, indicated by the mark “[***],” were omitted and have
been filed separately with the Securities and Exchange Commission pursuant to
the Registrant’s application requesting confidential treatment pursuant to Rule
24b-2 of the Securities Exchange Act of 1934, as amended.

 

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IN WITNESS WHEREOF, the Parties have executed this Agreement as of the Effective
Date.

 

CADILA HEALTHCARE LIMITED     PIERIS AG /s/ Nitin Parekh     /s/ Stephen S.
Yoder Name:   Nitin Parekh     Name:   Stephen S. Yoder Title:   Chief Financial
Officer     Title :   Chief Executive Officer /s/ Arun Parikh       Name:   Arun
Parikh       Title:   Sr. V.P. Legal      

 

Portions of the exhibit, indicated by the mark “[***],” were omitted and have
been filed separately with the Securities and Exchange Commission pursuant to
the Registrant’s application requesting confidential treatment pursuant to Rule
24b-2 of the Securities Exchange Act of 1934, as amended.

 

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SCHEDULE 1

Pieris Patents:

(a) all patent applications derived from any one of the Patent Cooperation
Treaty/PCT applications listed below in this Schedule 1 from i) to vi); (b) all
patents issuing from such patent applications (including certificates of
invention); (c) all patents and patent applications based on, corresponding to,
or claiming priority from any of the foregoing; (d) all reissues, substitutions,
confirmations, registrations, validations, re-examinations, additions,
continuations, continued prosecution applications, continuations-in-part, or
divisions of or to any of the foregoing; and (e) all term extensions,
supplementary protection certificates and other governmental action beyond the
original patent expiration date.

 

  i) PCT/DE98/02898

 

  ii) PCT/EP2004/009447

 

  iii) PCT/EP2007/057971

 

  iv) PCT/EP2009/051020

 

  v) PCT/EP2010/061436

 

  vi) PCT/EP2013/050158

 

Portions of the exhibit, indicated by the mark “[***],” were omitted and have
been filed separately with the Securities and Exchange Commission pursuant to
the Registrant’s application requesting confidential treatment pursuant to Rule
24b-2 of the Securities Exchange Act of 1934, as amended.

 

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SCHEDULE 2

CC MEMBERS

[***]

 

Portions of the exhibit, indicated by the mark “[***],” were omitted and have
been filed separately with the Securities and Exchange Commission pursuant to
the Registrant’s application requesting confidential treatment pursuant to Rule
24b-2 of the Securities Exchange Act of 1934, as amended.

 

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SCHEDULE 3

Plan

Zydus and Pieris shall plan the activities in the CC meeting and track the
progress on a regular basis.

 

Portions of the exhibit, indicated by the mark “[***],” were omitted and have
been filed separately with the Securities and Exchange Commission pursuant to
the Registrant’s application requesting confidential treatment pursuant to Rule
24b-2 of the Securities Exchange Act of 1934, as amended.

 

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SCHEDULE 4

Zydus Territory (subject to Section 4(3)):

[***]

 

Portions of the exhibit, indicated by the mark “[***],” were omitted and have
been filed separately with the Securities and Exchange Commission pursuant to
the Registrant’s application requesting confidential treatment pursuant to Rule
24b-2 of the Securities Exchange Act of 1934, as amended.

 

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SCHEDULE 5

[***]

 

Portions of the exhibit, indicated by the mark “[***],” were omitted and have
been filed separately with the Securities and Exchange Commission pursuant to
the Registrant’s application requesting confidential treatment pursuant to Rule
24b-2 of the Securities Exchange Act of 1934, as amended.

 

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SCHEDULE 6

Press Release

LOGO [g837896expppg039.jpg]

Zydus and Pieris Sign Broad Co-Development Alliance for Novel Anticalin®
Therapeutics

—cMet antagonist, PRS-110, to be the flagship program—

Ahmedabad, India; Freising, Germany.

Zydus Cadila, an innovative global pharmaceutical company that discovers,
develops, manufactures and markets a broad range of healthcare products, and
Pieris AG, a next generation therapeutic protein R&D company, have entered into
an alliance for development and commercialization of multiple novel
Anticalin®-based protein therapeutics, both companies announced today. The
collaboration combines Pieris’ drug discovery and early development capabilities
with Zydus’ expertise in biologics development, regulatory affairs and biologics
manufacturing. Under the terms of the agreement, Zydus will take the lead in
advancing Anticalin drug candidates through formal pre-clinical development and
into clinical development, undertaking drug development in accordance with ICH
guidelines. Zydus has been granted exclusive marketing rights in India and
several other emerging markets, while Pieris retains exclusive marketing rights
in key developed markets.

Mr. Pankaj R. Patel, Chairman and Managing Director, Zydus group said,
“Collaborating with established biotech companies on differentiated drug
candidates is an important component of Zydus’ ongoing transformation into an
innovation-led global healthcare provider, and we are pleased to add Anticalins
to our novel biologics pipeline”. Pieris CEO, Stephen Yoder, added, “With Zydus’
state-of-the-art manufacturing facilities and seasoned drug development team,
this collaboration will allow Pieris to unlock value on a global scale in a
cost-effective manner, significantly expanding the number of proprietary
Anticalin programs we can advance into clinical trials.”

The most advanced program in the collaboration is PRS-110, an Anticalin specific
for cMet, a target becoming increasingly validated across a broad spectrum of
tumors. PRS-110, which is a pure antagonist due to its monovalent target
engagement, has demonstrated the ability to

 

—CONTINUES—

 

Portions of the exhibit, indicated by the mark “[***],” were omitted and have
been filed separately with the Securities and Exchange Commission pursuant to
the Registrant’s application requesting confidential treatment pursuant to Rule
24b-2 of the Securities Exchange Act of 1934, as amended.

 

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inhibit both ligand-dependent and -independent cMet signaling in a variety of
animal models. Through this unique collaborative model, the companies seek to
develop candidates to proof-of-concept and will explore out-licensing
opportunities in Pieris’ territories at the appropriate time. Licensing revenues
would be shared on mutually agreed upon terms.

About Zydus:

Zydus Cadila is an innovative, global pharmaceutical company that discovers,
develops, manufactures and markets a broad range of healthcare therapies. The
group employs over 15,000 people worldwide and is dedicated to creating
healthier communities globally. Zydus is the only Indian pharma company to
launch its own patented NCE – Lipaglyn™, the world’s first drug to be approved
for the treatment of diabetic dyslipidemia. It aims to be a leading global
healthcare provider with a robust product pipeline, achieve sales of over $3
billion by 2015 and be a research-based pharmaceutical company by 2020.

The group has been making significant investments in the development and
manufacturing of Biologics for more than a decade. Zydus has developed a
pipeline of 17 Biosimilar drugs with six such drugs commercialized and others in
clinical development. Zydus capitalizes on its in-house drug development and
manufacturing strengths to partner in Novel Biologics opportunities and has so
far advanced two novel biologic drugs to the clinical trial stage. Zydus has one
of the largest Biologics manufacturing facilities in India with scales reaching
up to 11,000 L per batch. With a vision to provide high quality Biologics drugs
in a cost-effective manner Zydus aspires to be a world leader in the biologics
space. For more information, please visit: www.zyduscadila.com

About Pieris & Anticalins

Pieris AG is an independent, clinical-staged biotechnology company advancing its
proprietary Anticalin® technology to create differentiated drugs that are safer
and more effective than conventional approaches. Exclusive to Pieris, Anticalins
promise to address high-unmet medical needs and expand the potential of targeted
therapeutics. The company currently has a diverse proprietary pipeline and has,
in addition to Zydus, ongoing R&D collaborations with Daiichi Sankyo, the Sanofi
Group and Allergan. Privately held, Pieris has been funded by premier
biotechnology-focused venture capital, including lead investors OrbiMed Advisors
and Global Life Science Ventures. For more information, please visit:
www.pieris-ag.com.

Anticalins® are recombinantly engineered versions of human lipocalins,
low-molecular weight polypeptides that naturally bind, store and transport a
wide spectrum of molecules. To make Anticalins, Pieris makes discrete changes to
those lipocalin amino acid positions responsible in endogenous ligand binding,
thereby redirecting specificity away from the natural ligand and to virtually
any target of interest. By utilizing an endogenous binding protein as a
template, Pieris “hijacks” the natural function of the lipocalin to enable
diverse therapeutic applications.

—END—

 

Portions of the exhibit, indicated by the mark “[***],” were omitted and have
been filed separately with the Securities and Exchange Commission pursuant to
the Registrant’s application requesting confidential treatment pursuant to Rule
24b-2 of the Securities Exchange Act of 1934, as amended.

 

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For more information, please contact:     Zydus     Pieris AG Sujatha Rajesh    
Stephen Yoder, CEO +91 (0)9974051180     +49 (0) 8161 1411 400
sujatha.rajesh@zyduscadila.com     Rashmi Nair     Gretchen Schweitzer +91(0)
9724313237     +49 172 861 8540 rashminair@zyduscadila.com    
media@pieris-ag.com

Anticalin®, Anticalins® are registered trademarks of Pieris AG.

 

Portions of the exhibit, indicated by the mark “[***],” were omitted and have
been filed separately with the Securities and Exchange Commission pursuant to
the Registrant’s application requesting confidential treatment pursuant to Rule
24b-2 of the Securities Exchange Act of 1934, as amended.

 

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