Exhibit
4.8


 




 


OPTION AGREEMENT


 


Dated as of [•], 2014


 


between


 


		1.	Innocoll
                                         AG, a stock corporation under German law, registered with the commercial register at
                                         the Local Court of Regensburg under HRB 14298 (the “Company”),



 


and


 


		2.	[•] (the “Option
                                                                                                                                  Holder”).



 


The Company and
the Option Holder are each hereinafter individually referred to as a “Party” and together also as the “Parties”.


 




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CONTENT


 


	LIST OF SCHEDULES TO THE OPTION
    AGREEMENT	3
	 	 	 
	RECITAL	 	4
	 	 	 
	WITNESSETH	 	4
	 	 	 
	SECTION 1.	GENERAL	6
	 	 	 
	1.1	Definitions	6
	 	 	 
	1.2	Interpretation	8
	 	 	 
	SECTION 2. 	EXERCISE OF OPTION	8
	 	 	 
	SECTION 3. 	EXPIRATION OF OPTIONS	12
	 	 	 
	SECTION 4.	PURCHASE PRICE, EXERCISE PAYMENT, TAX
    WITHHOLDING	12
	 	 	 
	SECTION 5. 	ADJUSTMENTS	13
	 	 	 
	SECTION 6. 	NO DILUTION OR IMPAIRMENT	15
	 	 	 
	SECTION 7. 	RESERVATION OF AUTHORIZED CAPITAL II	15
	 	 	 
	SECTION 8. 	NEGOTIABILITY, ETC.	15
	 	 	 
	SECTION 9. 	PRIOR UNDERSTANDINGS	16
	 	 	 
	SECTION 10. 	AMENDMENTS	16
	 	 	 
	SECTION 11. 	BINDING AGREEMENTS	16
	 	 	 
	SECTION 12. 	NOTICES	16
	 	 	 
	SECTION 13. 	EFFECTIVENESS	16
	 	 	 
	SECTION 14. 	SEVERABILTY	17
	 	 	 
	SECTION 15. 	SECTION HEADINGS	17
	 	 	 
	SECTION 16. 	CHOICE OF LAW	17


 




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LIST OF SCHEDULES TO THE OPTION AGREEMENT


 


	Schedule I	 	
	 	 	List of Option Holders being entitled to
    subscribe for New Ordinary Shares out of Authorized Capital II
	 	 	 
	Schedule II	 	Draft Exercise Notice
	 	 	 
	Schedule III	 	Draft resolution of the Management Board
    on the utilization of the Authorized Capital I
	 	 	 
	Schedule IV/1	 	Draft Subscription Offer (Authorized Capital
    II)
	 	 	 
	Schedule IV/2	 	Draft Subscription Offer (contingent capital)
	 	 	 
	Schedule IV/3	 	Draft Subscription Offer (own shares)
	 	 	 
	Schedule V/1	 	Draft Subscription Declaration (Authorized
    Capital II)
	 	 	 
	Schedule V/2	 	Draft Subscription Declaration (contingent
    capital)
	 	 	 
	Schedule V/3	 	Draft Subscription Declaration (own shares)


 




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RECITALS


 


This Option Agreement (the
“Agreement”),
dated as of [•], 2014


 


between


 


		1.	Innocoll
                                         AG, a stock corporation under German law, registered with the commercial register at
                                         the Local Court of Regensburg under HRB 14298 (the “Company”),



 


and


 


		2.	[•] (the “Option Holder”).



 


The
Company and the Option Holder are each hereinafter individually referred to as a “Party” and together also
as the “Parties”.


 


WITNESSETH


 


WHEREAS,
the Company is registered with the commercial register of the local court of Regensburg under HRB 14298. The registered
purpose of the Company is the holding and managing of participations in enterprises, and of similar rights, in particular, but
not limited to, the pharmaceutical area. The Company has been established by way of transformation (Formwechsel) of Innocoll
GmbH, a limited liability company under German law. The Option Holder is a member of the management of the Company or of a related
company within the meaning of Sec. 15 et seq AktG (“Affiliate”).


 


WHEREAS,
by shareholder resolution dated 16 June, 2014, the Company has created authorized capital II (Genehmigtes Kapital
II - “Authorized Capital II”) set out in Sec. 4 para. 9 of the articles of association of Innocoll AG (“Articles
of Association”) in the amount of EUR 97,154.00 in total. According to this, the management board of


 




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Innocoll AG
(“Management Board”) is entitled to increase the Company’s share capital during a period of five (5)
years beginning with the registration of this Authorized Capital II with the commercial register.


 


WHEREAS,
the Option Holder shall be entitled to subscribe up to a specific number of new Ordinary Shares in case of such resolution
of the Management Board within a period (“Expiration Period”) ending on [•] (“Expiration
Date”). The specific numbers of Ordinary Shares to which the Option Holder is entitled to, at the beginning,
is set out in Section 2.1.


 


WHEREAS,
beside the Option Holder, other employees and the members of the management board are as well entitled to subscribe
up to a specific number of new Ordinary Shares, to be created by utilization of the Authorized Capital II (“Other Option
Holders”).


 


WHEREAS,
the subscription rights of the Option Holders, which have not been exercised within the Expiration Period, will expire
upon the Expiration Date.


 


WHEREAS,
the Parties intend to set out in this Agreement the conditions as to price, timing and further formalities according
to which the Option Holder shall be entitled to request the Management Board to serve the Options granted by allocation of new
Ordinary Shares for contributions in cash.


 


WHEREAS,
the Parties further intend to set out the terms and conditions under which the Option Holder shall be entitled to exercise
its subscription right resulting from this Agreement for new Ordinary Shares.


 


WHEREAS,
The Company has listed its American Depositary Shares (“ADS(s)”) representing its ordinary
shares on the NASDAQ Global Market. Each ADS represents an ownership interest in 1/13.25 Ordinary Shares of the Company which
are deposited with Citibank N.A. and held by Citigroup Global Markets AG as custodian. It is intended that the Option Holders
shall have the right to exchange Ordinary Shares issued pursuant to this Agreement into ADSs.


 


NOW, THEREFORE,
in consideration of the foregoing premises and mutual covenants and agreements contained herein and intending to be
legally bound hereby, the Parties agree as follows:


 




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SECTION 1.      GENERAL.


 


1.1   Definitions.


 


In this Agreement, unless the context
requires otherwise, the following terms shall have the definitions set forth below:


 


“ADS(s)” shall have
the meaning set forth in the WITNESSETH hereto.


 


“Affiliate” shall
have the meaning set forth in the WITNESSETH hereto.


 


“Agreement” shall
have the meaning set forth in the RECITALS hereto.


 


“Articles of Association”
shall mean the articles of association of Innocoll AG.


 


“Authorized
Capital II” shall have the meaning set forth in the WITNESSETH hereto, including, as the case may by, new authorized
capital as referred to in the WITNESSETH.


 


“Blocking Periods” shall
have the meaning set forth in SECTION 2 hereto.


 


“Business
Day” means any day on which banks are open for business in Frankfurt am Main, Germany (any day other than a Saturday,
Sunday or legal or bank holiday in Frankfurt am Main, Germany).


 


“Capital Increase” shall
have the meaning set forth in SECTION 2.


 


“Company” shall
have the meaning set forth in the RECITALS hereto.


 


“Control”
shall mean the possession, directly or indirectly, of the power to direct or cause the direction of the management
and policies of a Person, either through the ownership of a majority of a Person’s voting capital stock, by contract or otherwise.


 


“Deposit Agreement”
shall have the meaning set forth in SECTION 2 hereto.


 


“Exercise Payment” shall
have the meaning set forth in SECTION 4 hereto.


 


“Exercise Period” shall
have the meaning set forth in SECTION 2.


 


“Exercise Notice” shall
have the meaning set forth in SECTION 2 hereto.


 


“Expiration Date” shall
have the meaning set forth in the WITNESSETH hereto.


 


“Expiration Period”
shall have the meaning set forth in the WITNESSETH hereto.


 


“Individual Total Number
of Ordinary Shares” shall have the meaning set forth in SECTION 2 hereto.


 




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“Initial Exercise Period”
shall have the meaning set forth in SECTION 2 hereto.


 


“Initial Issuance Date”
shall have the meaning set forth in SECTION 5 hereto.


 


“Management
Board” shall mean the management board (Vorstand) of the Company.


 


“New Ordinary Shares”
shall have the meaning set forth in SECTION 2 hereto.


 


“New Shares” shall
have the meaning set forth in SECTION 2 hereto.


 


“Option(s)” shall
have the meaning set forth in SECTION 2 hereto.


 


“Option Holder(s)” shall
have the meaning set forth in the RECITALS hereto.


 


“Option Rights” shall
have the meaning set forth in SECTION 5 hereto.


 


“Ordinary
Shares” shall mean the ordinary shares of Innocoll AG, without par value (as mentioned in Sec. 4 para. 2 of the
Articles of Association).


 


“Other Option Holder(s)”
shall have the meaning set forth in the RECITALS hereto.


 


“Parties” shall
mean Innocoll AG and the Option Holder.


 


“Person”
shall mean and include any natural person, corporation, general partnership, limited partnership, limited liability
company, proprietorship, other business organization, unincorporated organization, trust, union, association, government or any
department or agency thereof or other entity.


 


“Purchase Price” shall
have the meaning set forth in SECTION 4 hereto.


 


“Subsidiary”
in relation to any company, corporation or other legal entity (a “Holding Company”), a company,
corporation or other legal entity:


 


		(a)	which
                                         is controlled, directly or indirectly, by the Holding Company;



 


		(b)	more
                                         than half the issued share capital of which is beneficially owned, directly or indirectly,
                                         by the Holding Company,



 


and, for this
purpose, a legal entity shall be treated as being controlled by another if that other legal entity is able to determine the composition
of the majority of the board of directors or equivalent body.


 


“Subscription Declaration”
shall have the meaning set forth in SECTION 2 hereto.


 


“Subscription Offer”
shall have the meaning set forth in SECTION 2 hereto.


 


“Tax-Related Items”
shall have the meaning set forth in SECTION 4 hereto.


 




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“Trading
Day” shall mean such day on which the Nasdaq Global Market (“Nasdaq”) or such other
stock exchange where the Company’s shares or ADSs are listed, as applicable, are open for trading


 


“Triggering Transaction”
shall have the meaning set forth in SECTION 5 hereto.


 


1.2   Interpretation.


 


Unless a contrary
indication appears, in this Agreement, references to this Agreement include its schedules. References to paragraphs, clauses,
recitals or schedules are references to such provisions of this Agreement. References to a paragraph refer to the relevant paragraph
of the clause or schedule in which it appears.


 


Use of singular
shall include the plural and vice versa. Words denoting any gender shall include the other gender.


 


SECTION 2.    EXERCISE
OF OPTION.


 


2.1       The
Option Holder shall have the individual right to claim the allocation of new Ordinary Shares up to 10,744 Ordinary Shares (“Individual
Total Number of Ordinary Shares”) (“Option”) by notice to the Company using the form
set out in Schedule II (the “Exercise Notice”) which shall also contain the exact percentage of new
Ordinary Shares claimed by the Option Holder in relation to the individual total number of New Ordinary Shares.


 


Options may
be exercised by sending an Exercise Notice to the Company pursuant to Sec. 2.1 at any time during the year, unless there is a
Blocking Period as set out below (“Initial Exercise Period”). During a Blocking Period, Options must
not be exercised. To the extent an Initial Exercise Period coincides with a Blocking Period, the Initial Exercise Period shall
be shortened.


 


Blocking periods (“Blocking
Periods”) shall be


 


		(i)	the
                                         period from the end of the seventh Trading Day before, up to the third Trading Day after,
                                         the company’s general meeting; 



 


		(ii)	the
                                         period between the first Trading Day on which the company has published an offer to acquire
                                         new shares, bonds or option rights, up to the end of the last day of the subscription
                                         period for such offer; and



 




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		(iii)	the
                                         period beginning at the opening of trading on the first Trading Day that is two weeks
                                         prior to the end of each quarter and ending at the close of trading on the second Trading
                                         Day after the publication of the quarterly reports of the Company.



 


2.2       The Option
Holder shall further have the right to exchange such ordinary shares into ADSs. After their exchange into ADSs, the Option Holder
shall receive 13.25 ADS per Ordinary Share. To avoid fractional shares and ADSs, the number of Option Rights granted and of Option
Rights exercised at any time must always be divisible by four. The Company and the Option Holder agree to use commercially reasonable
efforts to perform all such acts and to execute any documents and instruments as are required or reasonably requested by the Company
and/or the depositary or the custodian to provide for the exchange of the Option Holder’s Ordinary Shares received upon exercise
of such Option Holder’s Ordinary Shares into ADSs.


 


Any fractions
of Ordinary Shares or ADSs shall not be delivered or compensated. However, if several Option Rights are exercised by the same
Option Holder, fractions of Ordinary Shares or ADSs shall be added up, subject, in the case of the ADSs to the provisions of the
deposit agreement by and among the Company and Citibank N.A. dated July 30, 2014 (“Deposit Agreement”).


 


2.3       After
having received an Exercise Notice, the Management Board may subject to its duly and properly executed discretion, offer subscription
to the Other Option Holders by announcing the content of the Exercise Notice received using the forms set out in Schedules IV
(“Subscription Offer”), however, subject to the stipulation set out in SECTION 4, according to which the Option
Holder shall pay or make adequate arrangements satisfactory to the Company to satisfy all Tax-Related Items, if applicable.


 


For the avoidance
of doubt, after receipt of an Exercise Notice, the Management Board shall not be obliged under this Agreement to offer subscription
to the Other Option Holders, but the Management Board may decide subject to its properly executed discretion, whether to offer
subscription to New Shares to the Other Option Holders following the procedure as set out below or whether only the Option Holder
shall be entitled to subscribe for New Shares.


 


Each Other Option
Holder intending to participate in the utilization of the Authorized Capital II (“Capital Increase”) must fill
in and sign its subscription declaration in duplicate as provided in sample form by Schedules V (“Subscription Declaration”)
together with the Subscription Offer within a period of three weeks from the day of


 




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receipt of the
Subscription Offer (“Exercise Period”). In case an Other Option Holder does not duly deliver such properly
filled in and signed Subscription Declaration in duplicate within the Exercise Period, such Other Option Holder may not participate
in such Capital Increase and is deemed to have waived its right to participate in such Capital Increase. However, participation
by any Other Option Holder is not permitted during a Blocking Period as set out in Sec. 2.1.


 


2.4       An Option
Holder shall (i) only subscribe for up to the amount of Ordinary Shares equal to the percentage set out in the Exercise Notice
in relation to the number of Ordinary Shares set forth in its individual Option Agreement and (ii) only subscribe for up to the
amount still available to such Option Holder due to previous participation(s) in the exercise of Options granted (if any).


 


In case the
Option results in a fraction of Ordinary Shares, the Management Board herewith is authorized, at its sole discretion, to round
fractions of Ordinary Shares, i.e. to round 4 and below down, but to round 5 and above up, to the next whole Ordinary Share amount.


 


2.5       After
receipt of an Exercise Notice and before sending a Subscription Offer to each Other Option Holder, the Management Board shall,
subject to its duly and properly executed discretion, pass, without undue delay (unverzüglich), a resolution to make
use of the Authorized Capital II as stated in Sec. 4 para. 9 of the Articles of Association (by using the draft resolution in
Schedule III) to issue new Ordinary Shares (“New Shares”) in the amount up to the total number of shares to
which Option Holders may permissibly be entitled to subscribe to. The Management Board may also, in its sole discretion, serve
the Options by utilization of (i) a contingent capital created for such purpose, if any, or (ii) own Ordinary Shares (eigene
Aktien), if any available for such purpose, provided that in any case of (i) and (ii) the relation of the number of Ordinary
Shares held by each Option Holder before the capital measure and Ordinary Shares held by each Option Holder after the capital
measure would not deviate from such relation resulting from a serve of Options by means of Authorized Capital II only. The Ordinary
Shares resulting from the realization of Options (New Shares or shares resulting from a contingent capital or own Ordinary Shares
are also referred to as “New Ordinary Shares”).


 


Example:


 


		•	Option
                                         Holders’ Options: 320 New Ordinary Shares (Option Holder A), 160 New Ordinary Shares
                                         (Option Holder B), 80 New Ordinary Shares (Option Holder C),



 




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		•	In
                                         the first step B sends an Exercise Notice and opts for 120 New Ordinary Shares. This
                                         meets with 75 % of his Option. This percentage has to be entered in the Exercise Note.



 


		•	In
                                         the second step the Management Board shall, subject to its duly and properly executed
                                         discretion, (i) initiate a Capital Increase or (ii) install any other measure in order
                                         to bring the Company into the position to fulfill the exercises of Options (e.g. acquisition
                                         of own shares, if permitted).



 


		•	In
                                         the third step the Management Board has to offer 75 % of the number of New Ordinary Shares
                                         set out in the individual option agreement of each Option Holder: 240 New Ordinary Shares
                                         for subscription by A, 120 New Ordinary Shares for subscription by B, 60 New Ordinary
                                         Shares for subscription by C,.



 


		•	In
                                         the forth step B subscribes for all the 120 offered New Ordinary Shares. A fails to deliver
                                         its duly signed Subscription Declarations in duplicate within the Exercise Period. C
                                         subscribes for 40 New Ordinary Shares.



 


		•	As
                                         a result, Option Holder B’s Option remains to the extent of 40 New Ordinary Shares, Option
                                         Holder A’s option to 320 New Ordinary shares, Option Holder C’s option to 40 New Ordinary
                                         Shares.



 


2.6     Further,
the Management Board or the Option Holders, as the case may be, shall fulfill, without undue delay, further necessary requirements
stipulated by law, e.g. duly increase the share capital of the Company on the basis of exercising the Authorized Capital II,
e.g. resolution on the utilization of the Authorized Capital II (Beschluss zur Ausnutzung
des Genehmigten Kapitals II) if making use of it, or exercising contingent capital, and application for registration
with the commercial register (Registeranmeldung). The Management Board shall, subject to its duly and properly executed
discretion, issue New Ordinary Shares only at the Purchase Price to each Option Holder.


 


2.7     If
the Option Holder or any of the other Option Holders should not claim one hundred (100) percent of the number of New Ordinary
Shares set forth in the Individual Option Agreement from the Company within an Exercise Notice or a Subscription Declaration,
the remaining amount of New Ordinary Shares set forth in the Individual Option Agreement shall be deemed one hundred percent of
New Ordinary Shares available for this Option Holder for a Exercise Notice and/or a (next) Subscription Declaration.


 


If
the Management Board receives several Exercise Notices on the same Business Day it shall add the amounts of New Ordinary Shares
claimed in each Exercise Notice and follow the procedure mentioned in the paragraphs above with regard to this total amount in
one and not in several steps. In case the Management Board receives several Exercise Notices not on the same Business Day but
during the procedure of an


 




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Issuance of
New Ordinary Shares due to (an) Exercise Notice(s), the Management Board shall, subject to its duly and properly executed discretion,
use its best efforts to ensure that the required capital increase(s) will be executed in due time and in a reasonable and cost
saving way.


 


SECTION 3.     EXPIRATION
OF OPTIONS.


 


To the extent
the Option Holder has not exercised its subscription rights within the Expiration Period, as the case may be, such subscription
rights shall expire upon the Expiration Date, as the case may be. In no event may this Option be exercised at any time after the
Expiration Date, as the case may be.


 


SECTION
4.    PURCHASE PRICE, EXERCISE PAYMENT , TAX WITHHOLDING.


 


The subscription
price / purchase price per New Ordinary Share amounts to USD 119.25, comprising capital contribution payments and agio payments,
being understood that a partial amount of EUR 1.00 will be characterized as share capital payment and the remaining amount shall
be regarded as agio. It is further understood that the purchase price of USD 119.25 per New Ordinary Share, divided by 13.25,
equals a purchase price of USD 9.00 per ADS. This subscription price / purchase price per New Ordinary Share may from time to
time be adjusted according to SECTION 5, whereas in no event the subscription price / purchase price shall be lower than EUR 1
per New Ordinary Share (“Purchase Price”).


 


The exercise
price to be paid in total by the Option Holder (each payment individually the “Exercise Payment”) shall be equal
to the Purchase Price multiplied by the number of New Ordinary Shares being purchased pursuant to the Subscription Declaration
by the Option Holder and be payable only by contribution in cash.


 


With respect
to any or all income tax, social insurance, payroll tax, payment on account or other tax-related items related to the Option Holder’s
receipt of New Ordinary Shares hereunder and legally applicable to the Option Holder (“Tax-Related Items”),
the Option Holder acknowledges that the ultimate liability for all Tax-Related Items is and remains with the Option Holder’s
responsibility.


 




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Prior to any
relevant taxable or tax withholding event, as applicable, the Option Holder shall pay or make adequate arrangements satisfactory
to the Company to satisfy all Tax-Related Items.


 


In this regard,
the Option Holder hereby authorizes the Company, or their respective agents, at the Company’s discretion, to satisfy the obligations
with regard to all Tax-Related Items as far as applicable by one or a combination of the following:


 


(1)         withholding
from the Option Holder’s wages or other cash compensation paid to Option Holder by the Company,


 


(2)         withholding
from proceeds of a sale of New Ordinary Shares acquired upon settlement of this Agreement (such sale being implemented by the
Company on the Option Holder’s behalf pursuant to this authorization) either through a voluntary sale or through a mandatory sale
arranged by the Company; or


 


(3)         withholding
the relevant number of New Ordinary Shares to be issued upon settlement of the Agreement in order to issue such New Ordinary Shares
to any other Option Holder or third party and to satisfy the Tax-Related Items by the respective proceeds therefrom.


 


SECTION 5.          ADJUSTMENTS.


 


5.1         The
Purchase Price shall be subject to adjustment from time to time in accordance with this SECTION 5 by resolution of the management
board. Such adjusted Purchase Price shall be equal for the Option Holder and all other Option Holders.


 


5.2        In case
the Company shall at any time combine its outstanding Ordinary Shares, the Purchase Price in effect immediately prior to such
combination shall be proportionately increased by the same ratio as the combination.


 


5.3


 


(i) In the event that:


 


(1)  the
Company shall declare any cash dividend upon its Ordinary Shares, or


 


(2) the
Company shall declare any dividend upon its Ordinary Share payable in shares or make any special dividend or other distribution
to the shareholders of its Ordinary Share, or


 




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(3) the
Company shall offer for subscription pro rata to the shareholder of its Ordinary Share any additional shares of stock of any class
or other rights, or


 


(4) there
shall be any capital reorganization or reclassification of the equity of the Company, including any subdivision or combination
of its outstanding Ordinary Shares, or consolidation or merger of the Company with, or sale of all or substantially all of its
assets to, another corporation, or


 


(5) there
shall be a voluntary dissolution, liquidation or winding up of the Company,


 


then, in connection
with such event, the Company shall give to the Option Holder, unless mandatory management duties, in particular, resulting from
deviating shareholders’ resolutions and / or equality principle requirements (Gleichbehandlungsgrundsatz) in favour of
all shareholders of the Company, by German corporate law or by German capital market law provide otherwise:


 


(ii) at least
thirty (30) days prior written notice of the date on which the books of the Company shall close or a record shall be taken for
such dividend, distribution or subscription rights or for determining rights to vote in respect of any such reorganization, reclassification,
consolidation, merger, sale, dissolution, liquidation or winding up; and


 


(iii) in the
case of any such reorganization, reclassification, consolidation, merger, sale, dissolution, liquidation or winding up, at least
thirty (30) days prior written notice of the date when the same shall take place. Such notice in accordance with the foregoing
clause (i) shall also specify, in the case of any such dividend, distribution or subscription rights, the date on which the shareholders
of Ordinary Shares shall be entitled thereto, and such notice in accordance with the foregoing clause (1) shall also specify the
date on which the holders of Ordinary Shares shall be entitled to exchange their Ordinary Share for securities or other property
deliverable upon such reorganization, reclassification, consolidation, merger, sale, dissolution, liquidation or winding up, as
the case may be. Each such written notice shall be given by first class mail, postage prepaid, addressed to the Option Holder
at the address of such Option Holder as shown on the books of the Company. With regard to the content of such notices, confidentiality
interests of the Company prevail.


 


5.4         Whenever
the Purchase Price shall be adjusted as provided in SECTION 5 hereof, the Company shall as promptly as practicable provide the
Option Holder with a statement, signed by the Management Board, showing in reasonable detail the facts requiring such adjustment
and the Purchase Price that will be effective after such adjustment. As regards the content of such statements, confidentiality
interests of the Company and equal principle requirements in favor of all shareholders (Gleichbehandlungsgrundsatz)
prevail. 


 




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SECTION 6.     NO DILUTION
OR IMPAIRMENT.


 


The Company
will not, or through reorganization, consolidation, merger, dissolution, sale of assets or any other voluntary action, avoid or
seek to avoid the observance or performance of any of the terms of this Agreement, but will at all times in good faith assist
in the carrying out of all such terms and in the taking of all such action as may be necessary or appropriate in order to protect
the rights of the Option Holder against dilution or other impairment, except if otherwise stated in this Agreement or otherwise
required by German corporate law, German capital market law or any other relevant German law provision or deviating shareholders’
resolutions.


 


SECTION 7.      RESERVATION
OF AUTHORIZED CAPITAL II.


 


Subject to the
duly and properly executed discretion of the Management Board, the Company shall avoid all actions which may result in a utilization
of the Authorized Capital II for other purposes than serving the Options granted by the Agreement, except (i) if statutory subscription
rights of other shareholders due to the Capital Increase or mandatory German law provisions require such a utilization or (ii)
if the delivery of New Ordinary Shares upon the exercise of Options can be granted by other share capital measures.


 


SECTION 8.      NEGOTIABILITY,
ETC.


 


Any existing
Option or future Option Right or this Agreement as a whole is not transferable by the Option Holder to a third party without consent
of the Company. The Company hereby declares in advance their consent to a transfer of Options in the event that the acquiring
third party accedes to all obligations under this Agreement.


 


Prior to the
exercise of the Option, the Option Holder shall not be entitled to any rights of a shareholder of the Company with respect to
shares for which this Option shall be exercisable, including, without limitation, the right to vote, to receive dividends or other
distributions or to exercise any preemptive rights, and shall not be entitled to receive any notice of any proceedings of the
Company, except as provided herein.


 




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SECTION 9.    PRIOR UNDERSTANDINGS.


 


This
Agreement represents the complete agreement of the Parties with respect to the subject matter included herein and supersedes any
and all previous agreements relating thereto. The Parties acknowledge that there have been no representations, warranties, covenants
or agreements made by any party hereto other than those contained in this Agreement. There are no side agreements to this Agreement.


 


SECTION 10.  AMENDMENTS.


 


Except
as otherwise expressly provided, this Agreement, including this provision, may be amended or modified only upon the consent of
the Parties.


 


SECTION 11.  BINDING
AGREEMENTS.


 


The
terms and conditions of this Agreement shall inure to the benefit of and be binding upon the Parties and their respective heirs,
legal representatives and successors. The executor, administrator or personal representative of the deceased Option Holder shall
execute and deliver any and all documents or legal instruments necessary or desirable to carry out the provisions of this Agreement.


 


SECTION 12.   NOTICES.


 


Any and all
notices, designations, consents, offers, acceptances, or any other communication provided for herein shall be given in writing
by overnight courier, or facsimile transmission which shall be addressed, or sent, to the Option Holder at the respective address
as set forth in the RECITALS. Each such notice shall be deemed received 24 hours after it is sent. Alternatively and notwithstanding
any stipulation in this Agreement providing for a stricter form, communication under this Agreement may also happen by email.


 


SECTION 13.  EFFECTIVENESS.


 


This Agreement shall become legally
effective upon signing by both Parties.


 




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SECTION 14.   SEVERABILTY.


 


The invalidity
or unenforceability of any provisions of this Agreement in any jurisdiction shall not affect the validity, legality or enforceability
of the remainder of this Agreement in such jurisdiction or the validity, legality or enforceability of any provision of this Agreement
in any other jurisdiction, it being intended that all rights and obligations of the Parties be enforceable to the fullest extent
permitted by law. Any such invalid, ineffective or unenforceable provision shall be deemed replaced by such valid, effective and
enforceable provision as comes closest to the economic intent and purpose of such invalid, ineffective or unenforceable provision
as regards subject-matter, amount, time, place and extent. The aforesaid shall apply mutatis mutandis to any gap in this Agreement.


 


SECTION 15.  SECTION
HEADINGS.


 


Headings
contained in this Agreement are inserted only as a matter of convenience and in no way define, limit or extend the scope or intent
of this Agreement or any provisions hereof.


 


SECTION 16.   CHOICE
OF LAW.


 


This
Agreement is governed by and shall be construed in accordance with the laws of the Federal Republic of Germany.


 


[Signature pages follow]


 




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Innocoll AG


 


	Place,
    Date:		 		 


 


	Signature:		 


 


	Name:		 


 


Title: Chairman of the Supervisory
Board


 




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	Place,
    Date:		 		 


 






	Signature:		 







 






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