Document:

Exhibit

Exhibit 10.1

MIDWESTONE FINANCIAL GROUP, INC.
EMPLOYMENT AGREEMENT
This Employment Agreement (“Agreement”) is made and entered into as of May 11, 2017 (the “Effective Date”), by and between MidWestOne Financial Group, Inc. (the “Company”) and Mitch Cook (“Executive,” and together with the Company, the “Parties”).
RECITALS
A.Executive is currently employed by the Company, pursuant to the terms of that certain Employee Covenant Agreement entered into as of December 12, 2014 (the “Prior Agreement”), by and between Mitch Cook and the Company.
B.The Company desires to employ Executive pursuant to the terms of this Agreement.
C.Executive desires to be employed by the Company pursuant to the terms of this Agreement.
D.The Parties have made commitments to each other on a variety of important issues concerning Executive’s employment, including the performance that will be expected of Executive, the compensation Executive will be paid, how long and under what circumstances Executive will remain employed and the financial details relating to any decision that either the Company or Executive may make to terminate this Agreement.
AGREEMENTS
In consideration of the foregoing and the mutual promises and covenants of the Parties set forth in this Agreement, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties, intending to be legally bound, hereby expressly covenant and agree as follows:
1.Employment Period. The Company shall employ Executive, and Executive shall be so employed, during the Employment Period in accordance with the terms of this Agreement. The “Employment Period” shall be the period beginning on May 1, 2017 and ending on December 31, 2018, unless sooner terminated as provided herein. The Employment Period shall automatically be extended for one (1) additional year beginning on January 1, 2019 and on each January 1 thereafter unless either Party notifies the other Party, by written notice delivered no later than ninety (90) days prior to such January 1, that the Employment Period shall not be extended for an additional year. Notwithstanding any provision of this Agreement to the contrary, if a Change in Control occurs during the Employment Period, this Agreement shall remain in effect for the two (2)-year period following the Change in Control and shall then terminate.
2.    Duties. During the Employment Period, Executive shall devote Executive’s full business time, energies and talents to serving as the Senior Regional President for the Minnesota and Wisconsin markets of the Company, at the direction of the Company’s Chief Operating Officer (the “COO”). Executive shall have such duties and responsibilities as may be assigned to Executive from time to time by the COO, which duties and responsibilities shall be commensurate with Executive’s position, shall perform all duties assigned to Executive faithfully and efficiently, subject to the direction of the COO and shall have such authorities and powers as are inherent to the undertakings applicable to Executive’s position and necessary to carry out the responsibilities and duties required of Executive hereunder. Executive shall perform the 

1

duties required by this Agreement at the Company’s primary location in Golden Valley, Minnesota unless the nature of such duties requires otherwise. Notwithstanding the foregoing provisions of this Section 2, during the Employment Period, Executive may devote reasonable time to activities other than those required under this Agreement, including activities of a charitable, educational, religious or similar nature (including professional associations) to the extent such activities do not, in the reasonable judgment of the COO, inhibit, prohibit, interfere with or conflict with Executive’s duties under this Agreement or conflict in any material way with the business of the Company or an Affiliate; provided, however, that Executive shall not serve on the board of directors of any business (other than the Company or an Affiliate) or hold any other position with any business without receiving the prior written consent of the COO.
3.    Compensation and Benefits. Subject to the terms of this Agreement, during the Employment Period, while Executive is employed by the Company, the Company shall compensate Executive for Executive’s services as follows:
(a)    Executive shall be compensated at an annual rate of two hundred ten thousand dollars ($210,000.00) (the “Annual Base Salary”), which shall be payable in accordance with the normal payroll practices of the Company then in effect. Beginning on January 1, 2018 and on each anniversary of such date, Executive’s Annual Base Salary shall be reviewed, and may be adjusted, by the Company’s Board of Directors.
(b)    Executive shall be eligible to receive performance-based annual incentive bonuses (each, the “Incentive Bonus”) from the Company for each fiscal year ending during the Employment Period. Any such Incentive Bonus shall be paid to Executive within thirty (30) days of the completion of the respective fiscal year audit by the Company’s auditor, but in no event later than two and one-half (21⁄2) months after the close of each such fiscal year. During the fiscal year ending December 31, 2017, Executive’s Incentive Bonus shall be determined pursuant to the Commercial Incentive Plan. For any fiscal year thereafter during the Term, Executive’s Incentive Bonus shall be determined pursuant to the Company’s Management Bonus Program. For the avoidance of doubt, the Parties acknowledge and agree that Executive shall no longer be eligible to participate in the Commercial Incentive Plan for any fiscal year during the Term that begins on or after January 1, 2018.
(c)    During the Employment Period, Executive shall be eligible to participate, subject to the terms thereof, in all incentive plans and programs of the Company, including such cash and deferred bonus programs and equity incentive plans as may be in effect from time to time with respect to senior executives employed by the Company, on as favorable a basis as other similarly situated senior executives. During the Employment Period, Executive and Executive’s dependents, as the case may be, shall be eligible to participate, subject to the terms thereof, in all pension and similar benefit plans (including qualified, non-qualified and supplemental plans) and all medical, dental, vision, disability, group and executive life, accidental death and travel accident insurance and other similar welfare benefit plans and programs of the Company as may be in effect from time to time with respect to senior executives employed by the Company, on as favorable a basis as other similarly situated senior executives.
(d)    Executive shall be entitled to accrue paid time off (“PTO”) at a rate of no less than thirty (30) days of PTO per calendar year, subject to the Company’s PTO programs and policies as may be in effect during the Employment Period.
(e)    Executive shall be eligible to be reimbursed by the Company, on terms that are substantially similar to those that apply to other similarly situated senior executives employed by the Company, for reasonable out-of-pocket expenses for entertainment, travel, meals, lodging and similar items 

2

that are consistent with the Company’s expense reimbursement policy and actually incurred by Executive in the promotion of the Company’s business. Executive shall have use of a Company-provided automobile and receive reimbursement for expenses associated with such automobile in accordance with the Company’s policy as may be in effect from time to time.
4.    Rights upon Termination. Executive’s right to benefits, if any, for periods after the Termination Date shall be determined in accordance with this Section 4:
(a)    Minimum Benefits. If the Termination Date occurs following the Effective Date and prior to the end of the Employment Period for any reason, Executive shall be entitled to the Minimum Benefits in addition to any other benefits to which Executive may be entitled under the following provisions of this Section 4 or the express terms of any employee benefit plan or as required by law. Any benefits to be provided to Executive pursuant to this Section 4(a) shall be provided within thirty (30) days after the Termination Date; provided, however, that any benefits, incentives or awards payable as described in Section 4(f) shall be made in accordance with the provisions of the applicable plan, program or arrangement. Except as may otherwise be provided expressly to the contrary in this Agreement or as otherwise provided by law, nothing in this Agreement shall be construed as requiring Executive to be treated as employed by the Company following the Termination Date for purposes of any employee benefit plan or arrangement in which Executive may participate at such time.
(b)    Termination for Cause, Death, Disability or Voluntary Resignation. If the Termination Date occurs following the Effective Date and prior to the end of the Employment Period and is a result of a Termination for Cause, Executive’s death or Disability, or termination by Executive other than for Good Reason, then, other than the Minimum Benefits, Executive shall have no right to benefits under this Agreement (and the Company shall have no obligation to provide any such benefits) for periods after the Termination Date.
(c)    Termination other than for Cause or Termination for Good Reason. If Executive’s employment with the Company is subject to a Termination other than during a Covered Period, then, in addition to Minimum Benefits, the Company shall provide Executive the following benefits:
(i)    Commencing on the first Company payroll date that occurs on or following the sixtieth (60th) day following the Termination Date, Executive shall receive the Severance Amount (less any amount described in Section 4(c)(ii)), with such amount to be paid in six (6) substantially equal monthly installments (subject to the remaining provisions of this paragraph), with each successive payment being due on the next monthly payroll date following the first installment, provided that any such monthly installments that would have been paid in the sixty (60)-day period following the Termination Date but for the Release requirement in Section 5 shall be paid on the first Company payroll date that occurs on or following the sixtieth (60th) day following the Termination Date, and the number of remaining substantially equal monthly installments to be made shall be reduced from six (6) by any such “catch-up” payments that are made.
(ii)    To the extent any portion of the Severance Amount exceeds the “safe harbor” amount described in Treasury Regulation §1.409A-1(b)(9)(iii)(A), Executive shall receive such portion of the Severance Amount that exceeds the “safe harbor” amount in a single lump sum payment payable on the first Company payroll date that occurs on or following the sixtieth (60th) day following the Termination Date.

3

(iii)    Executive (and Executive’s dependents, as may be applicable) shall be entitled to the benefits described in Section 4(e).
(d)    Termination upon a Change in Control. If Executive’s employment with the Company is subject to a Termination within a Covered Period, then, in addition to Minimum Benefits, the Company shall provide Executive the following benefits:
(i)    On the sixtieth (60th) day following the Termination Date, the Company shall pay Executive a lump sum payment in an amount equal to the Severance Amount.
(ii)    Executive (and Executive’s dependents, as may be applicable) shall be entitled to the benefits provided in Section 4(e).
(e)    Medical, Dental and Vision Benefits. If Executive’s employment with the Company is subject to a Termination, then to the extent that Executive or any of Executive’s dependents may be covered under the terms of any medical, dental or vision plans of the Company (or any Affiliate) for active employees immediately prior to the Termination, then, for as long as Executive is eligible for and elects coverage under the health care continuation rules of COBRA, the Company shall provide Executive and those dependents with coverage equivalent to the coverage received while Executive was employed with the Company, with Executive required to pay the same amount as Executive would pay if Executive continued in employment with the Company during such period; provided, however, that such coverage shall be provided only to the extent that it does not result in any additional tax or other penalty being imposed on the Company or any Affiliate. The coverages under this Section 4(e) may be procured directly by the Company (or any Affiliate, if appropriate) apart from and outside of the terms of the respective plans, provided that Executive and Executive’s dependents comply with all of the terms of the substitute medical, dental or vision plans, and provided, further, that the cost to the Company shall not exceed the cost for continued COBRA coverage. In the event Executive or any of Executive’s dependents is or becomes eligible for coverage under the terms of any other medical and/or dental and/or vision plan of a subsequent employer with plan benefits that are comparable to Company (or any Affiliate) plan benefits, the Company’s obligations under this Section 4(e) shall cease with respect to the eligible Executive and/or dependents. Executive and Executive’s dependents must notify the Company (or any Affiliate) of any subsequent employment and provide information regarding medical and/or dental and/or vision coverage available.
(f)    Other Benefits.
(i)    Executive’s rights following a termination of employment with the Company and its Affiliates for any reason with respect to any benefits, incentives or awards provided to Executive pursuant to the terms of any plan, program or arrangement sponsored or maintained by the Company or an Affiliate, whether tax-qualified or not, which are not specifically addressed herein, shall be subject to the terms of such plan, program or arrangement, and this Agreement shall have no effect upon such terms except as specifically provided herein.
(ii)    Except as specifically provided herein, the Company shall have no further obligations to Executive under this Agreement following Executive’s termination of employment for any reason.
(g)    Removal from any Boards and Positions. Upon Executive’s termination of employment for any reason under this Agreement, Executive shall be deemed to resign (i) if a member, from the Board and board of directors of any Affiliate and any other board to which Executive has been appointed or nominated by or on behalf of the Company, (ii) from each position with the Company or any Affiliate, 

4

including as an officer of the Company or any of its Affiliates and (iii) as a fiduciary of any employee benefit plan of the Company.
5.    Release. Notwithstanding any provision of this Agreement to the contrary, no payments or benefits shall be owed to Executive under Section 4(c), 4(d) or 4(e) (except for the Minimum Benefits) unless Executive executes and delivers to the Company a Release within forty-five (45) days following the Termination Date, and any applicable revocation period has expired prior to the sixtieth (60th) day following the Termination Date.
6.    Excise Tax Limitation.
(a)    It is the intention of the Parties that no portion of any payment under this Agreement, or payments to or for the benefit of Executive under any other agreement or plan, be deemed to be an Excess Parachute Payment. The present value of payments to or for the benefit of Executive in the nature of compensation, receipt of which is contingent on a Change in Control, and to which Code Section 280G applies (in the aggregate “Total Payments”) shall not exceed an amount equal to one dollar ($1.00) less than the maximum amount that the Company may pay without loss of deduction under Code Section 280G(a). Present value for purposes of this Agreement shall be calculated in accordance with Code Section 280G(d)(4). Within one hundred twenty (120) days following the earlier of (i) the giving of the notice of termination or (ii) the giving of notice by the Company to Executive of its belief that there is a payment or benefit due Executive that will result in an Excess Parachute Payment, the Parties, at the Company’s expense, shall obtain the opinion of an Independent Advisor, which opinion need not be unqualified, which sets forth (A) Executive’s applicable “base amount” (as defined under Code Section 280G), (B) the present value of Total Payments and (C) the amount and present value of any Excess Parachute Payments. In the event that such opinion determines that there would be an Excess Parachute Payment, the payment hereunder or any other payment determined by such Independent Advisor to be includable in Total Payments shall be modified, reduced or eliminated, in accordance with Code Section 409A, as specified by Executive in writing delivered to the Company within ninety (90) days of Executive’s receipt of such opinions or, if Executive fails to so notify the Company, then as the Company shall reasonably determine, so that under the bases of calculation set forth in such opinions there will be no Excess Parachute Payment. The provisions of this Section 6, including the calculations, notices and opinion provided for herein, shall be based upon the conclusive presumption that (A) the compensation and benefits provided for in Section 2 and (B) any other compensation earned by Executive pursuant to the Company’s compensation programs that would have been paid in any event, are reasonable compensation for services rendered, even though the timing of such payment may be triggered by a Change in Control.
(b)    The Parties hereby recognize that the restrictive covenants under Section 7 have value that is equivalent in amount to some or all of the Severance Amount (and potentially other termination benefits) and that such value shall be recognized in the Code Section 280G calculations contemplated hereunder. The Independent Advisor shall make the determination of the actual fair market value of the restrictive covenants under Section 7 at the time of the Change in Control.

5

7.    Restrictive Covenants.
(a)    Confidential Information.
(i)    Executive acknowledges that, during the course of Executive’s employment with the Company, Executive may produce and have access to confidential and/or proprietary, non‐public information concerning the Company or its Affiliates, including marketing materials, financial and other information concerning customers and prospective customers, customer lists, records, data, trade secrets, proprietary business information, pricing and profitability information and policies, strategic planning, commitments, plans, procedures, litigation, pending litigation and other information not generally available to the public (collectively, “Confidential Information”). Executive shall not directly or indirectly use, disclose, copy or make lists of Confidential Information for the benefit of anyone other than the Company, either during or after Executive’s employment with the Company, except to the extent that such information is or thereafter becomes lawfully available from public sources, or such disclosure is authorized in writing by the Company, required by law or any competent administrative agency or judicial authority, or otherwise as reasonably necessary or appropriate in connection with the performance by Executive of Executive’s duties hereunder. If Executive receives a subpoena or other court order or is otherwise required by law to provide information to a governmental authority or other person concerning the activities of the Company or any of its Affiliates, or Executive’s activities in connection with the business of the Company or any of its Affiliates, Executive shall immediately notify the Company of such subpoena, court order or other requirement and deliver forthwith to the Company a copy thereof and any attachments and non-privileged correspondence related thereto. Executive shall take reasonable precautions to protect against the inadvertent disclosure of Confidential Information. Executive shall abide by the Company’s reasonable policies, as in effect from time to time, respecting avoidance of interests conflicting with those of the Company and its Affiliates. In this regard, Executive shall not directly or indirectly render services to any person or entity where Executive’s service would involve the use or disclosure of Confidential Information. Executive shall not use any Confidential Information to guide Executive in searching publications or other publicly available information, selecting a series of items of knowledge from unconnected sources and fitting them together to claim that Executive did not violate any agreements set forth in this Agreement.
(ii)    Executive shall not be held criminally or civilly liable under any federal or state trade secret law for the disclosure of a trade secret that (A) is made (1) in confidence to a federal, state, or local government official, either directly or indirectly, or to an attorney, and (2) solely for the purpose of reporting or investigating a suspected violation of law; or (B) is made in a complaint or other document filed in a lawsuit or other proceeding, if such filing is made under seal. Accordingly, Executive has the right to disclose in confidence trade secrets to federal, state, and local government officials, or to an attorney, for the sole purpose of reporting or investigating a suspected violation of law. Executive also has the right to disclose trade secrets in a document filed in a lawsuit or other proceeding, but only if the filing is made under seal and protected from public disclosure. Nothing in this Agreement is intended to conflict with 18 U.S.C. § 1833(b) or create liability for disclosures of trade secrets that are expressly allowed by 18 U.S.C. § 1833(b). Nothing in this Agreement shall be construed to authorize, or limit liability for, an act that is otherwise prohibited by law, such as the unlawful access of material by unauthorized means.
(iii)    Executive acknowledges and agrees that nothing contained in this Agreement limits Executive’s ability to file, pursuant to any applicable whistleblower statute or program (each, a “Whistleblower Program”), a charge or complaint with any federal, state, municipal or local governmental agency or commission (“Government Agencies”). Executive further understands that this Agreement does not limit Executive’s ability to communicate or cooperate with any Government Agencies or otherwise participate in any investigation or proceeding that may be conducted by any Government Agency, 

6

including providing information, without notice to the Company. This Agreement also does not limit Executive’s right to receive financial incentive pursuant to a Whistleblower Program for information provided to any Government Agencies.
(b)    Documents and Property.
(i)    All records, files, documents and other materials or copies thereof relating to the business of the Company or its Affiliates that Executive prepares, receives or uses shall be and remain the sole property of the Company and, other than in connection with the performance by Executive of Executive’s duties hereunder, shall not be removed from the premises of the Company or any of its Affiliates without the Company’s prior written connect, and shall be promptly returned to the Company upon Executive’s termination of employment for any reason, together with all copies (including copies or recordings in electronic form), abstracts, notes or reproductions of any kind made from or about the records, files, documents or other materials.
(ii)    Executive acknowledges that Executive’s access to and permission to use the Company’s and any Affiliate’s computer systems, networks and equipment, and all Company and Affiliate information contained therein, is restricted to legitimate business purposes on behalf of the Company. Any other access to or use of such systems, network, equipment and information is without authorization and is prohibited except that Executive may use a Company-provided computer for reasonable personal use in accordance with the Company’s Technology Use Policy as in effect from time to time. The restrictions contained in this Section 7(b) extend to any personal computers or other electronic devices of Executive that are used for business purposes relating to the Company or any Affiliate. Executive shall not transfer any Company or Affiliate information to any personal computer or other electronic device that is not otherwise used for any business purpose relating to the Company. Upon the termination of Executive’s employment with the Company for any reason, Executive’s authorization to access and permission to use the Company’s and any Affiliate’s computer systems, networks and equipment, and any Company and Affiliate information contained therein, shall cease.
(c)    Non-Competition and Non-Solicitation. The Parties have jointly reviewed the operations of the Company and have agreed that the primary service area of the Company’s lending and deposit taking functions in which Executive will actively participate extends to an area that encompasses a fifty (50)-mile radius from each banking or other office location of the Company and its Affiliates where Executive has provided services to the Company during the twenty-four (24) month period immediately preceding the date on which Executive’s employment terminates (the “Restrictive Area”). Therefore, as an essential ingredient of and in consideration of this Agreement and Executive’s employment with the Company, Executive shall not directly or indirectly do any of the following (all of which are collectively referred to in this Agreement as the “Restrictive Covenant”):
(i)    During Executive’s employment with the Company and for a period of forty-five (45) days immediately following the termination of Executive’s employment for any reason, engage or invest in, own, manage, operate, finance, control, participate in the ownership, management, operation or control of, be employed by, associated with or in any manner connected with, serve as a director, officer or consultant to, lend Executive’s name or any similar name to, lend Executive’s credit to or render services or advice to, in each case in the capacity that Executive provided services to the Company or any Affiliate, any person, firm, partnership, corporation or trust that owns, operates or is in the process of forming a Financial Institution with an office located, or to be located at an address identified in a filing with any regulatory authority, within the Restrictive Area; provided, however, that the ownership by Executive of shares of the capital stock of any Financial Institution, which shares are listed on a securities exchange or 

7

quoted on the National Association of Securities Dealers Automated Quotation System and which do not represent more than five (5) percent (5%) of the institution’s outstanding capital stock, shall not violate any terms of this Agreement;
(ii)    During Executive’s employment with the Company and for a period of twelve (12) months immediately following the termination of Executive’s employment for any reason, either for Executive or any Financial Institution: (A) induce or attempt to induce any employee of the Company or any of its Affiliates with whom Executive had significant contact to leave the employ of the Company or any of its Affiliates; or (B) in any way interfere with the relationship between the Company or any of its Affiliates and any employee of the Company or any of its Affiliates with whom Executive had significant contact;
(iii)    During Executive’s employment with the Company and for a period of six (6) months immediately following the termination of Executive’s employment for any reason, either for Executive or any Financial Institution: (A) solicit the business of any person or entity known to Executive to be a customer of the Company or any of its Affiliates, where Executive had significant contact with such person or entity, with respect to products, activities or services that compete in whole or in part with the products, activities or services of the Company or any of its Affiliates; or (B) induce or attempt to induce any customer, supplier, licensee or business relation of the Company or any of its Affiliates with whom Executive had significant contact to cease doing business with the Company or any of its Affiliates or in any way interfere with the relationship between the Company or any of its Affiliates and their respective customers, suppliers, licensees or business relations with whom Executive had significant contact; or
(iv)    During Executive’s employment with the Company and for a period of twelve (12) months immediately following the termination of Executive’s employment for any reason, serve as the agent, broker or representative of, or otherwise assist, any person or entity in obtaining services or products from any Financial Institution within the Restrictive Area, with respect to products, activities or services that Executive devoted time to on behalf of the Company or any of its Affiliates and that compete in whole or in part with the products, activities or services of the Company or any of its Affiliates.
(d)    Works Made for Hire Provisions. The Parties acknowledge that all work performed by Executive for the Company or any of its Affiliates shall be deemed a “work made for hire.” The Company shall at all times own and have exclusive right, title and interest in and to all Confidential Information and Inventions, and the Company shall retain the exclusive right to license, sell, transfer and otherwise use and dispose of the same. Any and all enhancements of the technology of the Company or any of its Affiliates that are developed by Executive shall be the exclusive property of the Company. Executive hereby assigns to the Company any right, title and interest in and to all Inventions that Executive may have, by law or equity, without additional consideration of any kind whatsoever from the Company or any of its Affiliates. Executive shall execute and deliver any instruments or documents and do all other things (including the giving of testimony) requested by the Company (both during and after the termination of Executive’s employment with the Company) in order to vest more fully in the Company or any of its Affiliates all ownership rights in the Inventions (including obtaining patent, copyright or trademark protection therefor in the United States and/or foreign countries).
(e)    Remedies for Breach of Restrictive Covenant. Executive has reviewed the provisions of this Agreement with legal counsel, or has been given adequate opportunity to seek such counsel, and Executive acknowledges that the covenants contained in this Section 7 are reasonable with respect to their duration, geographical area and scope. Executive further acknowledges that the restrictions contained in this Section 7 are reasonable and necessary for the protection of the legitimate business interests of the 

8

Company, that they create no undue hardships, that any violation of these restrictions would cause substantial injury to the Company and such interests, and that such restrictions were a material inducement to the Company to enter into this Agreement. In the event of any violation or threatened violation of these restrictions, the Company, in addition to and not in limitation of, any other rights, remedies or damages available to the Company under this Agreement or otherwise at law or in equity, shall be entitled to preliminary and permanent injunctive relief to prevent or restrain any such violation by Executive and any and all persons directly or indirectly acting for or with Executive, as the case may be. If Executive violates the Restrictive Covenant and the Company brings legal action for injunctive or other relief, the Company shall not, as a result of the time involved in obtaining such relief, be deprived of the benefit of the full period of the Restrictive Covenant. Accordingly, the Restrictive Covenant shall be deemed to have the duration specified herein computed from the date the relief is granted but reduced by the time between the period when the Restrictive Period began to run and the date of the first violation of the Restrictive Covenant by Executive.
(f)    Other Agreements. In the event of the existence of another agreement between the Parties that (a) is in effect during the Restrictive Period, and (b) contains restrictive covenants that conflict with any of the provisions of this Section 7, then the more restrictive of such provisions from the two (2) agreements shall control for the period during which both agreements would otherwise be in effect.
8.    No Set-Off; No Mitigation. Except as provided herein, the Company’s obligation to provide benefits under this Agreement and otherwise to perform its obligations hereunder shall not be affected by any circumstances, including any set-off, counterclaim, recoupment, defense or other right the Company may have against Executive or others. In no event shall Executive be obligated to seek other employment or take any other action by way of mitigation of the amounts payable to Executive under any of the provisions of this Agreement, and such amounts shall not be reduced whether or not Executive obtains other employment.
9.    Notices. Notices and all other communications under this Agreement shall be in writing and shall be deemed given when mailed by United States registered or certified mail, return receipt requested, postage prepaid, addressed as follows:
If to the Company:
MidWestOne Financial Group, Inc. 
Attention: MidWestOne Bank Senior Vice President and Director of Human Resources 
102 South Clinton Street 
Iowa City, Iowa 52240 

If to Executive: Executive’s address on file with the Company

or to such other address as either Party may furnish to the other in writing, except that notices of changes of address shall be effective only upon receipt.
10.    Applicable Law. All questions concerning the construction, validity and interpretation of this Agreement and the performance of the obligations imposed by this Agreement shall be governed by the internal laws of the State of Minnesota applicable to agreements made and wholly to be performed in such state without regard to conflicts of law provisions of any jurisdiction, and any court action commenced to enforce this Agreement shall have as its sole and exclusive venue the County of Hennepin, Minnesota.

9

11.    Entire Agreement. This Agreement constitutes the entire agreement between the Parties concerning the subject matter hereof, and supersedes all prior negotiations, undertakings, agreements and arrangements with respect thereto, whether written or oral, specifically including the Prior Agreement. If a court of competent jurisdiction determines that any provision of this Agreement is invalid or unenforceable, then the invalidity or unenforceability of that provision shall not affect the validity or enforceability of any other provision of this Agreement and all other provisions shall remain in full force and effect. The various covenants and provisions of this Agreement are intended to be severable and to constitute independent and distinct binding obligations. Without limiting the generality of the foregoing, if the scope of any covenant contained in this Agreement is too broad to permit enforcement to its full extent, such covenant shall be enforced to the maximum extent permitted by law, and such scope may be judicially modified accordingly.
12.    Withholding of Taxes. The Company may withhold from any benefits payable under this Agreement all federal, state, city and other taxes as may be required pursuant to any law, governmental regulation or ruling.
13.    No Assignment. Executive’s rights to receive benefits under this Agreement shall not be assignable or transferable whether by pledge, creation of a security interest or otherwise, other than a transfer by will or by the laws of descent or distribution. In the event of any attempted assignment or transfer contrary to this Section 13, the Company shall have no liability to pay any amount so attempted to be assigned or transferred. This Agreement shall inure to the benefit of and be enforceable by Executive’s personal or legal representatives, executors, administrators, successors, heirs, distributees, devisees and legatees.
14.    Successors. This Agreement shall be binding upon and inure to the benefit of the Company, its successors and assigns. The Company shall not effect the sale or other disposition of all or substantially all of its assets unless either (a) the person or entity acquiring the assets, or a substantial portion of the assets, expressly assumes by an instrument in writing all duties and obligations of the Company under this Agreement, or (b) the Company provides, through the establishment of a separate reserve, for the payment in full of all amounts that are or may reasonably be expected to become payable to Executive under this Agreement.
15.    Legal Fees. All reasonable legal fees and related expenses (including the costs of experts, evidence and counsel) paid or incurred by Executive pursuant to any dispute or question of interpretation relating to this Agreement shall be paid or reimbursed by the Company if Executive is successful on the merits pursuant to a legal judgment or arbitration.
16.    Amendment. This Agreement may not be amended or modified except by written agreement signed by the Parties.
17.    Code Section 409A.
(a)    To the extent any provision of this Agreement or action by the Company would subject Executive to liability for interest or additional taxes under Code Section 409A, it shall be deemed null and void, to the extent permitted by law and deemed advisable by the Company. It is intended that this Agreement will comply with Code Section 409A, and this Agreement shall be administered accordingly and interpreted and construed on a basis consistent with such intent. Notwithstanding any provision of this Agreement to the contrary, no termination or similar payments or benefits shall be payable hereunder on account of Executive’s termination of employment unless such termination constitutes a “separation from service” within the meaning of Code Section 409A. For purposes of Code Section 409A, all installment payments of deferred compensation made hereunder, or pursuant to another plan or arrangement, shall be deemed to be separate payments. To the extent any reimbursements or in-kind benefit payments under this 

10

Agreement are subject to Code Section 409A, such reimbursements and in-kind benefit payments shall be made in accordance with Treasury Regulation Section 1.409A-3(i)(1)(iv). This Agreement may be amended to the extent necessary (including retroactively) by the Company to avoid the application of taxes or interest under Code Section 409A, while maintaining to the maximum extent practicable the original intent of this Agreement. This Section 17 shall not be construed as a guarantee of any particular tax effect for Executive’s benefits under this Agreement and the Company does not guarantee that any such benefits will satisfy the provisions of Code Section 409A or any other provision of the Code.
(b)    Notwithstanding any provision of this Agreement to the contrary, if Executive is determined to be a Specified Employee as of the Termination Date, then, to the extent required pursuant to Code Section 409A, payments due under this Agreement that are deemed to be deferred compensation shall be subject to a six (6)-month delay following the Termination Date; and all delayed payments shall be accumulated and paid in a lump-sum payment as of the first day of the seventh month following the Termination Date (or, if earlier, as of Executive’s death), with all such delayed payments being credited with interest (compounded monthly) for this period of delay equal to the prime rate in effect on the first day of such six (6)-month period. Any portion of the benefits hereunder that were not otherwise due to be paid during the six (6)-month period following the Termination Date shall be paid to Executive in accordance with the payment schedule established herein.
18.    Deferral of Nondeductible Compensation. If Executive’s aggregate compensation (including benefits that are deemed remuneration for purposes of Code Section 162(m)) from the Company and the Affiliates for any calendar year exceeds the maximum amount of compensation deductible by the Company or any Affiliate in any calendar year under Code Section 162(m) (for purposes of this paragraph, the “maximum allowable amount”), then any such amount in excess of the maximum allowable amount shall be mandatorily deferred with interest thereon at four percent (4%) per annum to a calendar year such that the amount to be paid to Executive in such calendar year, including deferred amounts and interest thereon, does not exceed the maximum allowable amount. Subject to the foregoing, deferred amounts, including interest thereon, shall be payable at the earliest time permissible, in accordance with Code Section 409A.
19.    Construction. In this Agreement, unless otherwise stated, the following uses apply: (a) references to a statute shall refer to the statute and any amendments and any successor statutes, and to all regulations promulgated under or implementing the statute, as amended, or its successors, as in effect at the relevant time; (b) in computing periods from a specified date to a later specified date, the words “from” and “commencing on” (and the like) mean “from and including, “ and the words “to,” “until” and “ending on” (and the like) mean “to, but excluding”; (c) references to a governmental or quasi-governmental agency, authority or instrumentality shall also refer to a regulatory body that succeeds to the functions of the agency, authority or instrumentality; (d) indications of time of day shall be based upon the time applicable to the location of the principal headquarters of the Company; (e) the words “include,” “includes” and “including” means “include, without limitation,” “includes, without limitation” and “including, without limitation,” respectively; (f) all references to preambles, recitals, sections and exhibits are to preambles, recitals, sections and exhibits in or to this Agreement unless otherwise specified; (g) the words “hereof,” “herein,” “hereto,” “hereby,” “hereunder,” and other words of similar import refer to this Agreement as a whole (including exhibits); (h) any reference to a document or set of documents, and the rights and obligations of the parties under any such documents, means such document or documents as amended from time to time, and any and all modifications, extensions, renewals, substitutions or replacements thereof; (i) all words used shall be construed to be of such gender or number as the circumstances and context require; (j) the captions and headings of preambles, recitals, sections and exhibits appearing in or attached to this Agreement have been inserted solely for convenience of reference and shall not be considered a part of this Agreement, nor shall 

11

any of them affect the meaning or interpretation of this Agreement or any of its provisions; and (k) all accounting terms not specifically defined herein shall be construed in accordance with GAAP.
20.    Definitions. As used in this Agreement, the terms defined in this Section 19 have the meanings set forth below.
(a)    “1934 Act” means the Securities Exchange Act of 1934.
(b)    “Affiliate” means each company, corporation, partnership, Financial Institution or other entity that, directly or indirectly, is controlled by, controls, or is under common control with, the Company, where “control” means (i) the ownership of fifty-one percent (51%) or more of the Voting Securities or other voting or equity interests of any corporation, partnership, joint venture or other business entity or (ii) the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of such corporation, partnership, joint venture or other business entity.
(c)    “Agreement” has the meaning set forth in the preamble hereto.
(d)    “Annual Base Salary” has the meaning set forth in Section 3(a).
(e)    “Base Compensation” means the amount equal to the sum of (i) the greater of Executive’s then current Annual Base Salary or Executive’s Annual Base Salary as of the date one (1) day prior to the Change in Control, and (ii) the amount of the Incentive Bonus paid (or payable) for the most recently completed fiscal year of the Company.
(f)    “Board” means the board of directors of the Company.
(g)    “Change in Control” means:
(i)    the consummation of the acquisition by any “person” (as such term is defined in Section 13(d) or 14(d) of the 1934 Act) of “beneficial ownership” (within the meaning of Rule 13d-3 promulgated under the 1934 Act) of fifty percent (50%) or more of the combined voting power of the then outstanding Voting Securities of the Company; or
(ii)    the individuals who, as of the Effective Date, are members of the Board cease for any reason to constitute a majority of the Board, unless the election, or nomination for election by the shareholders, of any new director was approved by a vote of a majority of the Board, and such new director shall, for purposes of this Agreement, be considered as a member of the Board; or
(iii)    the consummation by the Company of: (A) a merger or consolidation if the shareholders immediately before such merger or consolidation do not, as a result of such merger or consolidation, own, directly or indirectly, more than fifty percent (50%) of the combined voting power of the then outstanding Voting Securities of the entity resulting from such merger or consolidation in substantially the same proportion as their ownership of the combined voting power of the Voting Securities of the Company outstanding immediately before such merger or consolidation; or (B) a complete liquidation or dissolution or an agreement for the sale or other disposition of all or substantially all of the assets of the Company.
Notwithstanding any provision in this definition to the contrary, a Change in Control shall not be deemed to occur solely because fifty percent (50%) or more of the combined voting power of the then outstanding securities of the Company are acquired by (A) a trustee or other fiduciary holding securities under one (1) or more employee benefit plans maintained for employees of the Company or an Affiliate or 

12

(B) any corporation that, immediately prior to such acquisition, is owned directly or indirectly by the shareholders in the same proportion as their ownership of stock immediately prior to such acquisition.
Further notwithstanding any provision in this definition to the contrary, in the event that any amount or benefit under this Agreement constitutes deferred compensation and the settlement of or distribution of such amount or benefit is to be triggered by a Change in Control, then such settlement or distribution shall be subject to the event constituting the Change in Control also constituting a “change in control event” under Code Section 409A.
(h)    “COBRA” means the Consolidated Omnibus Budget Reconciliation Act of 1985.
(i)    “Code” means the Internal Revenue Code of 1986.
(j)    “Company” has the meaning set forth in the preamble hereto.
(k)    “Confidential Information” has the meaning set forth in Section 7(a).
(l)    “Covered Period” means the period beginning six (6) months prior to a Change in Control and ending twenty-four (24) months after the Change in Control. 
(m)    “Disability” means that (i) Executive is unable to engage in any substantial gainful activity by reason of any medically determinable physical or mental impairment that can be expected to result in death or can be expected to last for a continuous period of not less than twelve (12) months, or (ii) Executive is, by reason of any medically determinable physical or mental impairment that can be expected to result in death or can be expected to last for a continuous period of not less than twelve (12) months, receiving income replacement benefits for a period of not less than three (3) months under an accident or health plan covering employees of the Company.
(n)    “Effective Date” has the meaning set forth in the preamble hereto.
(o)    “Employment Period” has the meaning set forth in Section 1.
(p)    “Excess Parachute Payment” has the meaning set forth in Code Section 280G.
(q)    “Executive” has the meaning set forth in the preamble hereto.
(r)    “Financial Institution” means a bank, savings bank, savings and loan association, credit union or similar financial institution.
(s)    “Good Reason” means the occurrence of any one (1) of the following events, unless Executive agrees in writing that such event shall not constitute Good Reason:
(i)    an adverse change in the nature, scope or status of Executive’s position, authorities or duties from those in effect in accordance with Section 2 immediately following the Effective Date, or if applicable and greater, immediately prior to the Covered Period;
(ii)    a reduction of ten percent (10%) or more in Executive’s Annual Base Salary or Incentive Bonus opportunity (each as measured as of the Effective Date), or a material reduction in Executive’s aggregate benefits or other compensation plans as in effect immediately following the Effective Date, or if applicable and greater, immediately prior to the Covered Period;

13

(iii)    relocation of Executive’s primary place of employment by more than twenty-five (25) miles from Executive’s primary place of employment immediately following the Effective Date or a requirement that Executive engage in travel that is materially greater than immediately following the Effective Date;
(iv)    failure by an acquirer to assume this Agreement at the time of a Change in Control; or
(v)    a material breach by the Company of this Agreement.
Notwithstanding any provision in this definition to the contrary, prior to Executive’s Termination for Good Reason, Executive must give the Company written notice of the existence of any condition set forth in clause (i) – (v) immediately above within ninety (90) days of its initial existence and the Company shall have thirty (30) days from the date of such notice in which to cure the condition giving rise to Good Reason, if curable. If, during such thirty (30)-day period, the Company cures the condition giving rise to Good Reason, the condition shall not constitute Good Reason. Further notwithstanding any provision in this definition to the contrary, in order to constitute a Termination for Good Reason, such Termination must occur within twenty-four (24) months of the initial existence of the applicable condition.
(t)    “Incentive Bonus” has the meaning set forth in Section 3(b).
(u)    “Independent Advisor” means an independent, nationally recognized accounting firm approved by the Parties, where such approval shall not be unreasonably withheld by either Party.
(v)    “Inventions” means all systems, procedures, techniques, manuals, databases, plans, lists, inventions, trade secrets, copyrights, patents, trademarks, discoveries, innovations, concepts, ideas and software conceived, compiled or developed by Executive in the course of Executive’s employment with the Company or any of its Affiliates and/or comprised, in whole or part, of Confidential Information. Notwithstanding the foregoing sentence, Inventions shall not include: (i) any inventions independently developed by Executive and not derived, in whole or part, from any Confidential Information or (ii) any invention made by Executive prior to Executive’s exposure to any Confidential Information.
(w)    “Minimum Benefits” means, as applicable, the following:
(i)    Executive’s earned but unpaid Annual Base Salary for the period ending on the Termination Date;
(ii)    Executive’s earned but unpaid Incentive Bonus, if any, for any completed fiscal year preceding the Termination Date;
(iii)    Executive’s accrued but unpaid PTO for the period ending on the Termination Date; 
(iv)    Executive’s unreimbursed business expenses and all other items earned and owed to Executive by the Company through and including the Termination Date; and
(v)    the benefits, incentives and awards described in Section 4(f).
(x)    “Parties” has the meaning set forth in the preamble hereto.

14

(y)    “Prior Agreement” has the meaning set forth in the recitals hereto.
(z)    “Release” means a general release and waiver substantially in the form attached hereto as Exhibit A.
(aa)    “Restrictive Area” has the meaning set forth in Section 7(c).
(bb)    “Restrictive Covenant” has the meaning set forth in Section 7(c).
(cc)    “Restrictive Period” means the duration of the Restrictive Covenant set forth in Section 7(c)(i)-7(c)(iv).
(dd)    “Severance Amount” means
(i)    for any Termination other than during a Covered Period, an amount equal to fifty percent (50%) of Executive’s then-current Annual Base Salary as of the respective Termination; or
(ii)    for a Termination during a Covered Period, an amount equal to fifty percent (50%) of Executive’s Base Compensation as of the respective Termination.
(ee)    “Specified Employee” means any person who is a “key employee” (as defined in Code Section 416(i) without regard to paragraph (5) thereof), as determined by the Company based upon the twelve (12)-month period ending on each December 31st (such twelve (12)-month period is referred to below as the “identification period”). If Executive is determined to be a key employee, Executive shall be treated as a Specified Employee for purposes of this Agreement during the twelve (12)-month period that begins on the April 1 following the close of the identification period. For purposes of determining whether Executive is a key employee, “compensation” means Executive’s W-2 compensation as reported by the Company for a particular calendar year.
(ff)    “Termination” means termination of Executive’s employment with the Company following the Effective Date and prior to the end of the Employment Period either:
(i)    by the Company, other than a Termination for Cause or a termination as a result of Executive’s death or Disability; or
(ii)    by Executive for Good Reason.
(gg)    “Termination Date” means the date of termination of Executive’s employment with the Company.
(hh)    “Termination for Cause” means only a termination of Executive’s employment with the Company as a result of:
(i)    Executive’s willful and continuing failure, that is not remedied within twenty (20) days after receipt of written notice of such failure from the Company, to perform Executive’s obligations hereunder; 
(ii)    Executive’s conviction of, or the pleading of nolo contendere to, a crime of embezzlement or fraud or a felony under the laws of the United States or any state thereof;

15

(iii)    Executive’s breach of fiduciary responsibility; or
(iv)    an act of dishonesty by Executive that is materially injurious to the Company.
Any determination of a Termination for Cause under this Agreement shall be made by resolution adopted by at least a two-thirds (2/3) vote of the Board at a meeting called and held for that purpose. Executive shall be provided with reasonable notice of such meeting and shall be given the opportunity to be heard, with the presence of counsel, prior to such vote being taken by the Board.
(ii)    “Total Payments” has the meaning set forth in Section 6(a).
(jj)    “Voting Securities” means any securities that ordinarily possess the power to vote in the election of directors without the happening of any precondition or contingency.
21.    Survival. The provisions of Sections 5 through 21 shall survive the termination of this Agreement.
[Signature page follows]

16

IN WITNESS WHEREOF, the Parties have executed this Agreement as of the Effective Date.
		
	MIDWESTONE FINANCIAL GROUP, INC.
	MITCH COOK

	
					
	By:
	/s/ SONDRA J. HARNEY
	 
	/s/ MITCH W. COOK

	 
	 
	 
	 
	(Signature)

	 
	 
	 
	 
	 

	Name:
	Sondra J. Harney
	 
	 

	 
	 
	 
	 
	(Address)

	 
	 
	 
	 
	 

	Its:
	Senior Vice President & Director of Human
	 
	 

	 
	Resources
	 
	(Address)

17

EXHIBIT A
RELEASE AND WAIVER OF CLAIMS
This Release and Waiver of Claims (“Agreement”) is made and entered into by and between MidWestOne Financial Group, Inc. (the “Company”), and [______________] (“Executive,” and together with the Company, the “Parties”).
RECITALS
A.    The Parties desire to settle fully and amicably all issues between them, including any issues arising out of Executive’s employment with the Company and the termination of that employment.
B.    Executive and the Company are parties to that certain Employment Agreement, made and entered into [_______________], as amended (the “Employment Agreement”).
AGREEMENTS
For and in consideration of the mutual promises contained herein, and for other good and sufficient consideration, the receipt of which is hereby acknowledged, the Parties, intending to be legally bound, hereby agree as follows:
1.    Termination of Employment. Executive’s employment with the Company shall be terminated effective as of the close of business on [_______________] (the “Termination Date”). 
2.    Compensation and Benefits. Subject to the terms of this Agreement, the Company shall compensate Executive under this Agreement as follows (collectively, the “Severance Payments”):
(a)    Severance Amount. [_______________].
(b)    Accrued Salary and Paid Time Off. Executive shall be entitled to a lump sum payment in an amount equal to Executive’s earned but unpaid annual base salary and accrued but unused paid time off for the period ending on the Termination Date, with such payment to be made on the first payroll date following the Termination Date.
(c)    COBRA Benefits. Executive and Executive’s qualified beneficiaries, as applicable, shall be entitled to continuation of group health coverage following the Termination Date under the Company’s group health plan, to the extent required under the Consolidated Omnibus Budget Reconciliation Act of 1986, with Executive required to pay the same amount as Executive would pay if Executive continued in employment with the Company during such period as described in Section 4(e) of the Employment Agreement.
(d)    Executive Acknowledgement. Executive acknowledges that, subject to fulfillment of all obligations provided for herein, Executive has been fully compensated by the Company, including under all applicable laws, and that nothing further is owed to Executive with respect to wages, bonuses, severance, other compensation, or benefits. Executive further acknowledges that the Severance Payments (other than (b) and (c) immediately above) are consideration for Executive’s promises contained in this Agreement, and that the Severance Payments are above and beyond any wages, bonuses, severance, other compensation, or benefits to which Executive is entitled from the Company under the terms of Executive’s employment or under any other contract or law that Executive would be entitled to absent execution of this Agreement.

18

(e)    Withholding. The Severance Payments shall be subject to all taxes and other payroll deductions required by law.
3.    Termination of Benefits. Except as provided in Section 2 above or as may be required by law, Executive’s participation in all employee benefit (pension and welfare) and compensation plans of the Company shall cease as of the Termination Date. Nothing contained herein shall limit or otherwise impair Executive’s right to receive pension or similar benefit payments that are vested as of the Termination Date under any applicable tax-qualified pension or other plans, pursuant to the terms of the applicable plan.
4.    Release of Claims and Waiver of Rights. Executive, on Executive’s own behalf and that of Executive’s heirs, executors, attorneys, administrators, successors, and assigns, fully and forever releases and discharges the Company, its predecessors, successors, parents, subsidiaries, affiliates, and assigns, and its and their directors, officers, trustees, employees, agents, and shareholders, both in their individual and official capacities, and the current and former trustees and administrators of each retirement and other benefit plan applicable to the employees and former employees of the Company, both in their official and individual capacities (the “Releasees”), from all liability, claims, demands, actions, and causes of action Executive now has, may have had, or may ever have, whether currently known or unknown, relating to acts or omissions as of or prior to Executive’s execution of this Agreement (the “Release and Waiver”), including liability, claims, demands, actions, and causes of action: 
(a)    Relating to Executive’s employment or other association with the Company, or the termination of such employment;
(b)    Relating to wages, bonuses, other compensation, or benefits;
(c)    Relating to any employment or change in control contract;
(d)    Relating to any employment law, including
		
	(i)
	The United States and State of Minnesota Constitutions, 

		
	(ii)
	The Minnesota Human Rights Act,

		
	(iii)
	The Civil Rights Act of 1964,

		
	(iv)
	The Civil Rights Act of 1991,

		
	(v)
	The Equal Pay Act,

		
	(vi)
	The Employee Retirement Income Security Act of 1974,

		
	(vii)
	The Age Discrimination in Employment Act (the “ADEA”),

		
	(viii)
	The Older Workers Benefit Protection Act,

		
	(ix)
	The Worker Adjustment and Retraining Notification Act,

		
	(x)
	The Americans with Disabilities Act,

		
	(xi)
	The Family and Medical Leave Act,

		
	(xii)
	The Occupational Safety and Health Act,

		
	(xiii)
	The Fair Labor Standards Act,

		
	(xiv)
	The National Labor Relations Act,

		
	(xv)
	The Genetic Information Nondiscrimination Act,

		
	(xvi)
	The Rehabilitation Act,

		
	(xvii)
	The Fair Credit Reporting Act,

		
	(xviii)
	Executive Order 11246,

		
	(xix)
	Executive Order 11141, and

		
	(xx)
	Each other federal, state, and local statute, ordinance, and regulation relating to employment;

(e)    Relating to any right of payment for disability;
(f)    Relating to any statutory or contractual right of payment; and
(g)    For relief on the basis of any alleged tort or breach of contract under the common law of the State of Minnesota or any other state, including defamation, intentional or negligent infliction of emotional distress, breach of the covenant of good faith and fair dealing, promissory estoppel, and negligence.

19

Executive acknowledges that statutes exist that render null and void releases and waivers of any claims, rights, demands, liabilities, actions, and causes of action that are unknown to the releasing or waiving party at the time of execution of the release and waiver. Executive waives, surrenders, and shall forego any protection to which Executive would otherwise be entitled by virtue of the existence of any such statutes in any jurisdiction, including the State of Minnesota.
5.    Exclusions from General Release. Excluded from the Release and Waiver are any claims or rights arising pursuant to this Agreement and any claims or rights that cannot be waived by law, as well as Executive’s right to file a charge with an administrative agency or participate in any agency investigation, including with the Equal Employment Opportunity Commission. Executive is, however, waiving the right to recover any money in connection with a charge or investigation and the right to recover any money in connection with a charge filed by any other individual or by the Equal Employment Opportunity Commission or any other federal or state agency, except where such waivers are prohibited by law.
6.    Covenant Not to Sue.
(a)    A “covenant not to sue” is a legal term that means Executive promises not to file a lawsuit in court. It is different from the Release and Waiver. Besides waiving and releasing the claims covered by Section 4 above, Executive shall never sue the Releasees in any forum for any reason covered by the Release and Waiver. Notwithstanding this covenant not to sue, Executive may bring a claim against the Company to enforce this Agreement or to challenge the validity of this Agreement under the ADEA. If Executive sues any of the Releasees in violation of this Agreement, Executive shall be liable to them for their reasonable attorneys’ fees and costs (including the costs of experts, evidence, and counsel) and other litigation costs incurred in defending against Executive’s suit. In addition, if Executive sues any of the Releasees in violation of this Agreement, the Company can require Executive to return all but a sum of $100 of the Severance Payments, which sum is, by itself, adequate consideration for the promises and covenants in this Agreement. In that event, the Company shall have no obligation to make any further Severance Payments.
(b)    If Executive has previously filed any lawsuit against any of the Releasees, Executive shall immediately take all necessary steps and execute all necessary documents to withdraw or dismiss such lawsuit to the extent Executive’s agreement to withdraw, dismiss, or not file a lawsuit would not be a violation of any applicable law or regulation.
7.    Restrictive Covenants. Section 7 of the Employment Agreement (entitled “Restrictive Covenants”), shall continue in full force and effect as if fully restated herein.
8.    No Admissions. The Company denies that any of the Releasees have taken any improper action against Executive, and this Agreement shall not be admissible in any proceeding as evidence of improper action by any of the Releasees. 
9.    Confidentiality of Agreement. Executive shall keep the existence and the terms of this Agreement confidential, except for Executive’s immediate family members and Executive’s legal and tax advisors in connection with services related hereto and except as may be required by law or in connection with the preparation of tax returns.
10.    Non-Waiver. The Company’s waiver of a breach of this Agreement by Executive shall not be construed or operate as a waiver of any subsequent breach by Executive of the same or of any other provision of this Agreement.
11.    Governing Law. This Agreement shall be governed by and construed under the laws of the State of Minnesota, without regard to principles of conflict of laws (whether in the State of Minnesota or 

20

any other jurisdiction) that would cause the application of the laws of any jurisdiction other than the State of Minnesota.
12.    Entire Agreement. This Agreement sets forth the entire agreement of the Parties regarding the subject matter hereof, and shall be final and binding as to all claims that have been or could have been advanced on behalf of Executive pursuant to any claim arising out of or related in any way to Executive’s employment with the Company and the termination of that employment. This Agreement may not be amended, modified, altered, or changed except by express written consent of the Parties.
13.    Counterparts. This Agreement may be executed in any number of counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same Agreement.
14.    Successors. This Agreement shall be binding upon and inure to the benefit of the Company, its successors and assigns.
15.    Enforcement. The provisions of this Agreement shall be regarded as divisible and separable and if any provision should be declared invalid or unenforceable by a court of competent jurisdiction, the validity and enforceability of the remaining provisions shall not be affected thereby. If the scope of any restriction or requirement contained in this Agreement is too broad to permit enforcement of such restriction or requirement to its full extent, then such restriction or requirement shall be enforced to the maximum extent permitted by law, and Executive hereby consents that any court of competent jurisdiction may so modify such scope in any proceeding brought to enforce such restriction or requirement. In addition, Executive stipulates that breach by Executive of restrictions and requirements under this Agreement will cause irreparable damage to the Releasees in the case of Executive’s breach and that the Company would not have entered into this Agreement without Executive binding Executive to these restrictions and requirements. In the event of Executive’s breach of this Agreement, in addition to any other remedies the Company may have, and without bond and without prejudice to any other rights and remedies that the Company may have for Executive’s breach of this Agreement, the Company shall be relieved of any obligation to provide Severance Payments and shall be entitled to an injunction to prevent or restrain any such violation by Executive and all persons directly or indirectly acting for or with Executive.
16.    Construction. In this Agreement, unless otherwise stated, the following uses apply: (a) references to a statute or law refer to the statute or law and any amendments and any successor statutes or laws, and to all regulations promulgated under or implementing the statute or law, as amended, or its successors, as in effect at the relevant time; (b) in computing periods from a specified date to a later specified date, the words “from” and “commencing on” (and the like) mean “from and including, “ and the words “to,” “until,” and “ending on” (and the like) mean “to, and including”; (c) references to a governmental or quasi-governmental agency, authority, or instrumentality also refer to a regulatory body that succeeds to the functions of the agency, authority, or instrumentality; (d) the words “include,” “includes,” and “including” (and the like) mean “include, without limitation,” “includes, without limitation,” and “including, without limitation,” (and the like) respectively; (e) the words “hereof,” “herein,” “hereto,” “hereby,” (and the like) refer to this Agreement as a whole; (f) any reference to a document or set of documents, and the rights and obligations of the parties under any such documents, means such document or documents as amended from time to time, and all modifications, extensions, renewals, substitutions, or replacements thereof; (g) all words used shall be construed to be of such gender or number as the circumstances and context require; and (h) the captions and headings of preambles, recitals, sections, and exhibits appearing in or attached to this Agreement have been inserted solely for convenience of reference and shall not be considered a part of this Agreement, nor shall any of them affect the meaning or interpretation of this Agreement or any of its provisions.
17.    Future Cooperation. In connection with any and all claims, disputes, or negotiations, or governmental, internal, or other investigations, lawsuits, or administrative proceedings (the “Legal 

21

Matters”) involving any of the Releasees (collectively, the “Disputing Parties” and, individually, each a “Disputing Party”), Executive shall make herself reasonably available, upon reasonable notice from the Company and without the necessity of subpoena, to provide information and documents, provide declarations and statements regarding a Disputing Party, meet with attorneys and other representatives of a Disputing Party, prepare for and give depositions and testimony, and otherwise cooperate in the investigation, defense, and prosecution of any and all such Legal Matters, as may, in the good faith and judgment of the Company, be reasonably requested. The Company shall consult with Executive and make reasonable efforts to schedule such assistance so as not to materially disrupt Executive’s business and personal affairs. The Company shall reimburse all reasonable expenses incurred by Executive in connection with such assistance, including travel, meals, rental car, and hotel expenses, if any; provided such expenses are approved in advance by the Company and are documented in a manner consistent with expense reporting policies of the Company as may be in effect from time to time.
18.    Representations by Executive. Executive acknowledges each of the following:
(a)    Executive is aware that this Agreement includes a release of all known and unknown claims.
(b)    Executive is legally competent to execute this Agreement and Executive has not relied on any statements or explanations made by the Company or its attorneys not otherwise set forth herein.
(c)    Any modifications, material or otherwise, made to this Agreement shall not restart or affect in any manner the original 21-day consideration period.
(d)    Executive has been offered at least 21 days to consider this Agreement.
(e)    Executive has been afforded the opportunity to be advised by legal counsel regarding the terms of this Agreement, including the Release and Waiver, and to negotiate such terms.
(f)    Executive, without coercion of any kind, freely, knowingly, and voluntarily enters into this Agreement.
(g)    Executive has the right to rescind the Release and Waiver by written notice to the Company within fifteen (15) calendar days after Executive has signed this Agreement, and the Release and Waiver shall not become effective or enforceable until fifteen (15) calendar days after Executive has signed this Agreement, as evidenced by the date set forth below Executive’s signature on the signature page hereto. Any such rescission must be in writing and delivered by hand, or sent by U.S. Mail within such fifteen (15)-day period, to the attention of [_______________]. If delivered by U.S. Mail, the rescission must be: (i) postmarked within the fifteen (15)-day period and (ii) sent by certified mail, return receipt requested.
[Signature page follows]

22

IN WITNESS WHEREOF, the Parties have executed this Agreement as of dates set forth below their respective signatures below.
	
						
	MIDWESTONE FINANCIAL GROUP, INC.
	 
	EXECUTIVE

	 
	 
	 
	 
	 
	 

	By:
	 
	 
	 
	 

	 
	(Name & Title)
	 
	(Name)

	 
	 
	 
	 
	 
	 

	Date:
	 
	 
	 
	 

	 
	 
	 
	 
	Date:
	 

23EX-10.3

 Exhibit 10.3 

CONFIDENTIAL TREATMENT REQUESTED 

EXCLUSIVE OPTION AGREEMENT 
 This
Exclusive Option Agreement (the “Agreement”) is entered into by and between Pieris Pharmaceuticals Inc., a Nevada corporation with an address of 255 State Street, 9th Floor,
Boston, MA 02109 and Pieris Pharmaceuticals GmbH, a German company with an address of Lise-Meitner-Strasse 30 85354 Freising, Germany (collectively, “Pieris”), and ASKA Pharmaceutical Co., Ltd., a Japanese corporation with an
address of 2-5-1 Shibaura, Minato-ku, Tokyo, Japan 108-8532 (“ASKA”), is effective on February 27, 2017 (the “Effective Date”).
Pieris and ASKA are also individually referred to herein as a “Party” and collectively as the “Parties”. 

RECITALS 
 WHEREAS,
Pieris and its Affiliates (capitalized terms as defined below) own or control the proprietary, lipocalin-derived Anticalin® technology and have developed the Licensed Product, Pieris’
Anticalin protein targeting hepcidin, and own or control certain patents, proprietary technology, know-how and information relating to such technology and product; and 

WHEREAS, ASKA wishes to obtain an exclusive option to license, and Pieris wishes to grant such exclusive option to license to ASKA,
certain patents and know-how, in order for ASKA to develop, manufacture, import, sell, export, and offer for sale and export the Licensed Product in the Licensed Field and in the Licensed Territory in
accordance with this Agreement. 
 NOW, THEREFORE, in consideration of the promises and mutual covenants herein below, and for other
good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties agree as follows: 
  

	1.	DEFINITIONS. The following capitalized terms or derivatives thereof (verbs, nouns, singular, plural), when used in this Agreement, shall have the following meanings: 

 

	1.1	“Additional Indication” means any disease within the Licensed Field other than the Initial Indication. 

  

	1.2	“Affiliate” means, with respect to a Party, any person or entity, which directly or indirectly controls, is controlled by, or is under common control with such Party. Solely as used in this definition,
the term “control” means (a) the ownership, directly or indirectly, beneficially or legally, of at least fifty percent (50%) of the outstanding voting securities or capital stock (or such lesser percentage which is the maximum allowed
to be owned by a person or entity in a particular jurisdiction) of such Party or other person or entity, as applicable, or such other comparable ownership interest with respect to any person or entity that is not a corporation; or (b) the
power, direct or indirect, whether through ownership of voting securities or partnership or other ownership interests of more than fifty percent (50%), by contract or otherwise, to direct the management and policies of a Party or such other person
or entity, as applicable. 

 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. 
  

 Confidential 

CONFIDENTIAL TREATMENT REQUESTED 
  

	1.3	“Anticalin” means, whether in nucleic acid or protein form, (a) any lipocalin mutein isolated from the Anticalin Libraries, or (b) any lipocalin mutein that, in each case, has been derived
(either physically, intellectually or by reverse engineering, in one (1) or more steps) from any lipocalin mutein referred to in Section (a) of this definition, in each case, which binds and recognizes a specific target. For the sake of
this Section, “mutein” shall mean a protein arising as a result of a mutation or a recombinant DNA procedure. 

  

	1.4	“Anticalin Affinity Maturation” means the process of engineering for an Anticalin protein to enhance its developability profile, such as increasing binding activities and specificity by introducing,
e.g., one or more amino acid mutations. 

  

	1.5	“Anticalin Characterization” means the assessment of binding and functional potency and/or the evaluation of the developability profile of Anticalin proteins. 

 

	1.6	“Anticalin Expression” means the heterologous expression of an Anticalin protein in a host cell. 

  

	1.7	“Anticalin Libraries” means any phage display library based on the [***] (Uniprot [***]). 

  

	1.8	“Anticalin Selection” means the process of screening an Anticalin Library with a defined target through the process of phage display, within a solution, and physically separating the target, containing
binding Anticalin proteins, from the solution containing non-binding Anticalin proteins. 

  

	1.9	“ASKA” has the meaning set forth in the preamble of this Agreement. 

  

	1.10	“Breakup Fee” has the meaning set forth in Section 2.2. 

  

	1.11	“CDA” has the meaning set forth in Section 8.1. 

  

	1.12	“Competing Product” means any biologic [***] in the Licensed Field and in the Licensed Territory. 

  

	1.13	“Competing Transaction” has the meaning set forth in Section 2.5. 

  

	1.14	“Commercially Reasonable Efforts” means such level of efforts required to carry out such obligation in a manner consistent with the efforts that a pharmaceutical company comparable with Pieris would
devote at the same stage of development or commercialization, as applicable, for its own internally developed therapeutic products in a similar area with similar market potential, at a similar stage of its product life, taking into account the
existence of other competitive products in the market place or under development, the proprietary position of the product, the regulatory structure involved, intellectual property considerations, the anticipated profitability of the product and
other relevant factors. It is understood that such product potential may change from time to time based upon changing scientific, business and marketing and return on investment considerations. 

  
 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. 
 Page 2 of 23 

 Confidential 

CONFIDENTIAL TREATMENT REQUESTED 
  

	1.15	“Definitive Agreements” has the meaning set forth in Section 2.1. 

  

	1.16	“Effective Date” has the meaning set forth in the preamble of this Agreement. 

  

	1.17	“Evaluation Period” has the meaning set forth in Section 2.2. 

  

	1.18	“Initial Indication” means [***]. 

  

	1.19	“Intellectual Property Rights” means, collectively, Patent Rights, copyrights, trademarks, designs, domain names, moral rights and all other intellectual property and proprietary rights.

  

	1.20	“JCC” has the meaning set forth in Section 4.9. 

  

	1.21	“JDC” has the meaning set forth in Section 4.7. 

  

	1.22	“Know-How” means any and all ideas, concepts, designs, technical information, techniques, data, database rights, discoveries, inventions, practices, methods,
procedures, processes, algorithm, knowledge, skill, experience, test data and any other information or technology, whether in written, electronic, graphic or any other form, including pharmaceutical, chemical, biological and biochemical
compositions, formulations, assays, active pharmaceutical ingredients (“APIs”), molecules, samples, cell lines, journals and laboratory notebooks. 

 

	1.23	“Licensed Field” means, with respect to the Licensed Product, [***]. 

  

	1.24	“Licensed Platform IP” means those Patents Rights in the Licensed Territory controlled by Pieris directed to the Pieris Platform Technology as set forth in Exhibit A. 

 

	1.25	“Licensed Product IP” means (a) all Know-How that is controlled by Pieris and is (i) used in connection with or otherwise covers the development,
manufacture, import, sale, export, and offer for sale and export of the Licensed Product or (ii) reasonably necessary for the development, manufacture, import, sale, export, and offer for sale and export of a Licensed Product, but excludes the
Licensed Platform IP and (b) any Patent Rights that are solely or jointly developed, or owned by Pieris as of the Effective Date and thereafter during the of the term of the Definitive Agreements, and that cover or are necessary for the
development, manufacture, import, sale, export, and offer for sale and export of the Licensed Product, but excluding the Licensed Platform IP. The Patent Rights within the Licensed Product IP are set forth in Exhibit B. 

  
 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. 
 Page 3 of 23 

 Confidential 

CONFIDENTIAL TREATMENT REQUESTED 
  

	1.26	“Licensed Product” means any pharmaceutical formulation containing PRS-080, Pieris’ pegylated Anticalin protein targeting hepcidin, as the active
pharmaceutical ingredient. 

  

	1.27	“Licensed Territory” means Japan, [***]. 

  

	1.28	“Net Sales” means all gross amounts invoiced by ASKA, its Affiliates or sublicensees for the sale of Licensed Product in the Licensed Territory to a Third Party, less the following items, provided that
they are bona fide and determined in the ordinary course of business in accordance with generally accepted accounting standards, consistently applied: 

  

	 	(a)	credits, refunds or allowances actually issued or granted to Third Party customers for spoiled, damaged, rejected, recalled, outdated and returned Licensed Product; and 

 

	 	(b)	sales, use or excise taxes and import/export duties or tariffs and similar governmental charges actually due or incurred in connection with the sales of Licensed Product to Third Party customers (but excluding taxes on
income), if shown separately in the invoice. 

 In no event shall Net Sales of the Licensed Product be less than [***] percent
([***]%) of [***]. 
 For purposes of this definition of Net Sales, [***] shall be considered [***] and not [***]. 

 

	1.29	“Up-Front License Fees” has the meaning set forth in Section 2.2. 

 

	1.30	“Option Rights” has the meaning set forth in Section 2.1. 

  

	1.31	“Patent Right” means any and all patent rights and all right, title and interest in all patent applications and patents that issue from them, all letters patent or equivalent rights and applications in
each case to the extent the same has not been held, by a court of competent jurisdiction, to be invalid or unenforceable in a decision from which no appeal can be taken or from which no appeal was taken within the time permitted for appeal. Patent
Rights include any extension, registration, confirmation, reissue, continuation, supplementary protection certificate, divisional, continuation-in-part, re-examination or renewal thereof or foreign counterparts of any of the foregoing. 

  

	1.32	“Party” and “Parties” have the meaning set forth in the preamble of 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. 
 Page 4 of 23 

 Confidential 

CONFIDENTIAL TREATMENT REQUESTED 
  

	1.33	“Phase 2a Study” means, for the purposes of this Agreement, that certain upcoming clinical study of the Licensed Product conducted by Pieris in the European Union, where the Licensed Product is
administered repeatedly to hemodialysis patients with chronic kidney disease. ASKA acknowledges that the final protocol for the Phase 2a Study is still under discussion and subject to further changes before the Phase 2a Study will be initiated.

  

	1.34	“Pieris” has the meaning set forth in the preamble of this Agreement. 

  

	1.35	“Pieris Platform Technology” means Anticalin Libraries, Anticalin Selection, Anticalin Expression, Anticalin Characterization, and Anticalin Affinity Maturation methods, all to the extent controlled by
Pieris. 

  

	1.36	“PL Claim” has the meaning set forth in Section 4.15. 

  

	1.37	“Royalty Term” has the meaning set forth in Section 4.10. 

  

	1.38	“Satisfaction Notice” has the meaning set forth in Section 2.2. 

  

	1.39	“SIAC” has the meaning set forth in Section 10.3. 

  

	1.40	“SIAC Rules” has the meaning set forth in Section 10.3. 

  

	1.41	“Success Criteria” means the criteria set forth in Exhibit C. 

  

	1.42	“Term” has the meaning set forth in Section 6.1. 

  

	1.43	“Third Party” means any person or entity other than Pieris, ASKA or their Affiliates. 

  

	2.	OPTION GRANT AND EXERCISE 

  

	2.1	Exclusive Option Grant. Subject to the terms and conditions of this Agreement, Pieris grants ASKA an option during the Term to acquire a non-exclusive license to use the
Licensed Platform IP and an exclusive license to use the Licensed Product IP to develop, manufacture, import, sale, export, and offer for sale and export the Licensed Product in the Licensed Field and Licensed Territory (collectively “Option
Rights”). For the avoidance of doubt, Pieris shall not develop, manufacture, import, sale, export, and offer for sale and export the Licensed Product in the Licensed Field and Licensed Territory after ASKA exercises the Option Rights and
Pieris and ASKA execute license agreements granting ASKA licenses to the Licensed Platform IP and Licensed Product IP under the terms and conditions of this Agreement (the “Definitive Agreements”). For further avoidance of doubt,
the Option Rights do not give ASKA any rights to any Intellectual Property Rights, Patent Rights, or Know-How; such rights shall be granted only under the Definitive Agreements. 

  
 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. 
 Page 5 of 23 

 Confidential 

CONFIDENTIAL TREATMENT REQUESTED 
  

	2.2	Success Criteria and Option Exercise Rights and Up-Front License Fees. Pieris shall use Commercially Reasonable Efforts to complete the Phase 2a Study for the Licensed
Product and shall submit to ASKA in writing the final results of its Phase 2a Study of the Licensed Product when such results are available. Such results shall be Confidential Information under the CDA. Upon receipt thereof, ASKA shall have [***] to
evaluate such results (“Evaluation Period”). By the end of the Evaluation Period, ASKA may notify Pieris in writing of its decision to exercise its Option Rights and its intent to enter into the Definitive Agreements
(“Satisfaction Notice”), and within [***] of the Parties’ execution of the Definitive Agreements and in consideration of the licenses granted to ASKA under the Definitive Agreements, ASKA shall pay Pieris the Up-Front Licensee Fees set forth in Exhibit D and Exhibit E (the “Up-Front License Fees”). If ASKA fails to provide a Satisfaction Notice by the
end of the Evaluation Period, this Agreement including the Option Rights shall immediately terminate. Notwithstanding the foregoing, if the final results of the Phase 2a Study meet the Success Criteria, but ASKA fails to provide a Satisfaction
Notice, then ASKA shall pay Pieris [***] Dollars ($[***] USD) (the “Breakup Fee”) within [***] of the end of the Evaluation Period. 

  

	2.3	Negotiation. ASKA and Pieris will make commercially reasonable efforts to prepare and negotiate the Definitive Agreements starting on the Effective Date (and prior to ASKA’s exercise of the Option Rights).
The Parties will further make commercially reasonable efforts to execute the Definitive Agreements no later than [***] after the date of ASKA’s exercise of the Option Rights hereunder. The detailed terms and conditions of the Definitive
Agreements shall be decided upon good faith negotiation between ASKA and Pieris during the Term of this Agreement. The Definitive Agreements, if executed, will include the provisions set forth in Section 4 of this Agreement
as well as other standard and customary terms. 

  

	2.4	Specific Exclusion. Pieris does not grant to ASKA any license, implied or otherwise, to any Licensed Platform IP or Licensed Product IP, Patent Rights, Intellectual Property Rights or other rights of Pieris other
than those rights expressly granted under the Agreement. Notwithstanding the foregoing, ASKA and Pieris hereby confirm that Licensed Platform IP and Licensed Product IP include all Intellectual Property Rights and
Know-How controlled by Pieris necessary for the sale, distribution, develop, manufacture, import, export, and offer for sale and export of Licensed Product by ASKA in the Licensed Territory, regardless whether
or not recognized at the time of 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. 
 Page 6 of 23 

 Confidential 

CONFIDENTIAL TREATMENT REQUESTED 
  

	2.5	No-Talk Provision. During the Term of this Agreement, Pieris will not, and will not cause nor permit any of its Affiliate or any of its or their directors, officers,
employees, agents or representatives to, (a) negotiate, authorize, recommend, enter into or propose to enter into, with any person other than ASKA, any transaction involving the grant of a license under the Licensed Platform IP and Licensed
Product IP to the Licensed Product in the Licensed Field and Licensed Territory (a “Competing Transaction”), (b) continue to engage in any pending discussions or negotiations with any Third Party concerning any previously
proposed Competing Transaction (if any), (c) encourage, solicit or initiate discussions, negotiations or submissions of proposals, indications of interest or offers in respect of a Competing Transaction, or (d) furnish or cause to be furnished
to any person any information in furtherance of a Competing Transaction.[***] 

  

	3.	EXCLUSIVE OPTION FEE 

  

	3.1	Subject to the terms and conditions of this Agreement, in consideration of the grant by Pieris of the Option Rights and for Pieris’ forbearance from licensing the Licensed Product to any Third Party other than ASKA
in the Licensed Field and Licensed Territory during the Term, ASKA shall pay Pieris Two Million Seven Hundred and Fifty Thousand Dollars ($2,750,000 USD) within [***] of receipt of an invoice from Pieris after the Effective Date. 

 

	4.	PROSPECTIVE TERMS OF THE DEFINITIVE AGREEMENTS 

  

	4.1	Terms of Definitive Agreements. The Definitive Agreements, if any, will include, but not be limited to, the terms and conditions set forth in this Section 4. 

 

	4.2	Exclusivity of Definitive Agreements. Subject to the terms and conditions of this Agreement, Pieris will (if the Definitive Agreements are executed) grant to ASKA a
non-exclusive license to the Licensed Platform IP and an exclusive license to the Licensed Product IP in the Licensed Field and Licensed Territory. The Definitive Agreements will commence on the effective date
of the Definitive Agreements and will expire after the end of the all payments due under the Definitive Agreements have been made.[***] 

  

	4.3	Additional Grants. Subject to the terms and conditions of this Agreement, Pieris will (if the Definitive Agreements are executed) grant to ASKA the right to use and reference any data (such as clinical, CMC, or
technical information) related to the Licensed Product that is necessary or useful for the development, manufacture or commercialization of the Licensed Product in the Licensed Field and in the Licensed Territory. Such grant would include data
generated by Pieris or its sublicensees engaged in the development, manufacture or commercialization of the Licensed Product outside the Licensed Territory to the extent that Pieris has the ability to grant such right. 

  
 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. 
 Page 7 of 23 

 Confidential 

CONFIDENTIAL TREATMENT REQUESTED 
  

	4.4	Sublicensing in Definitive Agreements. The Definitive Agreements will include the right for ASKA to grant sublicenses (through multiple tiers) during the term of the Definitive Agreements. Any sublicenses granted
by ASKA: 

  

	 	(a)	will be subject to the Definitive Agreements; 

  

	 	(b)	will expressly include the obligations described in this Section 4 for the benefit of Pieris; and 

  

	 	(c)	will require the transfer of all obligations, including the payment of milestones and royalties specified in the sublicense, to Pieris or its designee, if the Definitive Agreements are terminated. 

 

	4.5	Grantback Licenses. Subject to the terms and conditions of this Agreement, ASKA will (if the Definitive Agreements are executed) grant Pieris the right (with the right to sublicense through multiple tiers) to use
and reference any data (such as clinical, CMC, or technical information) related to the Licensed Product and generated by or on behalf of ASKA in the Licensed Territory and controlled by ASKA, that is necessary or useful for the development or
manufacture of the Licensed Product outside the Licensed Territory. Such grant would include any data generated by ASKA or its sublicensees engaged in the development of the Licensed Product in the Licensed Territory. 

 

	4.6	Non-Compete. During the term of the Definitive Agreements, neither Party shall in-license, manufacture or commercialize any
Competing Product for use in the Licensed Field in the Licensed Territory (or assist any Third Party in doing so). The Parties shall negotiate appropriate provisions with respect to this non-compete in the
event of a change of control of either Party in the Definitive Agreements. Until the first commercial sale of the Licensed Product in Japan, ASKA shall not develop any Competing Product (or assist any Third Party in doing so). 

 

	4.7	Development. ASKA will take primary responsibility for developing the Licensed Product in the Licensed Territory. All of the manufacturing, development and regulatory costs in the Territory will be borne by ASKA.
Pieris will commit to provide ASKA reasonable assistance, at ASKA’s cost, which may include relevant supplies of clinical materials, and access to related regulatory correspondence and other related materials in Pieris’s control to the
extent required by ASKA to enable them to fulfill their responsibilities and exploit their rights granted to them by Pieris under the Definitive Agreements. 

  
 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. 
 Page 8 of 23 

 Confidential 

CONFIDENTIAL TREATMENT REQUESTED 
  

 Pieris and ASKA will form a joint development committee (“JDC”) to assist
with and monitor execution of the development plan, which shall be approved by such JDC (including approving the protocols for such clinical trials). Decisions shall be made by consensus with (i) ASKA having the casting vote for all matters
solely related to development of the Licensed Product in the Licensed Territory, unless such a decision could reasonably be expected to have a negative effect on the development or commercialization of the Licensed Product outside the Licensed
Territory, and (ii) Pieris having the casting vote on all other matters, to the extent such decision does not increase the costs to be borne by ASKA. 
  

	4.8	Regulatory. ASKA shall use commercially reasonable efforts (to be defined in the Definitive Agreements) to obtain regulatory approval in its name or to cause authorized sublicensees to obtain regulatory approval
for the Licensed Product in the Licensed Field in the Licensed Territory on the timelines to be agreed by the Parties and included in a development plan approved by the JDC, the initial version of which shall be attached to the Definitive
Agreements, including conducting all development and regulatory activities needed to obtain such approvals. ASKA shall keep Pieris fully informed of all such development and regulatory activities, including access to all data and results thereof.
For the avoidance of doubt, Pieris will control the regulatory strategy for the Licensed Product outside of the Territory. 

  

	4.9	Commercialization. ASKA will control the commercial strategy for the Licensed Product within the Licensed Territory, including all pricing and reimbursement discussions for the Licensed Product. No later than the
application for marketing authorization in the Licensed Territory, the Parties will form a joint commercialization committee (“JCC”) to oversee the marketing and commercialization strategies for the Licensed Product in the Licensed
Territory. 

  

	4.10	Royalty Term. ASKA’s obligation to pay to Pieris royalties on Net Sales of the Licensed Product in the Licensed Territory shall begin on a
country-by-country basis on the first commercial sale of the Licensed Product in such country and ending on the later of (i) [***] ([***]) years after such first
commercial sale of the Licensed Product in such country, (ii) the expiration of regulatory exclusivity for such Licensed Product in such country, or (iii) the last to expire valid claim of the Patent Rights in the Licensed Platform IP and
the Licensed Product IP covering or claiming the Licensed Product in such country (“Royalty Term”). 

  

	4.11	Intellectual Property. Pieris shall own all Licensed Platform IP and Licensed Product IP and will be responsible for prosecution and maintenance thereof. Pieris shall keep ASKA reasonably informed of progress of
the prosecution of Licensed Product IP in the Licensed Territory, and Pieris will be responsible for all associated costs of such prosecution and maintenance of such Licensed Platform IP and Licensed Product IP. Any Patent Rights generated by ASKA
during the term of the Definitive Agreements that cover the Licensed Product (including its manufacture or use) shall be jointly owned by the Parties and Pieris shall have the right to sublicense (through multiple tiers) such Patent Rights outside
of the Licensed Territory. 

  
 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. 
 Page 9 of 23 

 Confidential 

CONFIDENTIAL TREATMENT REQUESTED 
  

	4.12	Trademarks. ASKA may select and shall own any trademarks for commercialization of the Licensed Product in the Licensed Territory. The Parties shall discuss in good faith any trademark licenses to the extent they
agree that there should be a common mark for commercialization of the Licensed Product in the Licensed Territory and other countries. 

  

	4.13	Marketing Authorization. ASKA or its sublicensee shall make commercially reasonable efforts to obtain and own any marketing authorization for the Licensed Product in the Licensed Field and Licensed Territory.

  

	4.14	Payments. The Definitive Agreements, if executed, will include the fees, royalties, milestone payments, and other terms listed in the attached Exhibit D and Exhibit E unless the Parties mutually
agree to revise any such terms. 

  

	4.15	Warranties. The Definitive Agreements, if executed, will include customary warranties and shall require ASKA to defend and indemnify Pieris from all liabilities resulting from ASKA’s fraud or willful
misconduct, except to the extent that a claim arises due to Pieris’s fraud or willful misconduct. Pieris warrants that the Licensed Product shall be free from defects in material and workmanship, and (when supplying the Licensed Product) that
the Licensed Product shall conform to product specifications separately agreed by the Parties in writing. With respect to any actual, potential, or threatened product liability claim, action, or proceeding relating to any Licensed Product
(“PL Claim”), Pieris shall in case of a PL Claim against Pieris, communicate with ASKA from time to time and observe the instructions of ASKA, and, in case of a PL Claim against ASKA, cooperate with ASKA in investigating the facts
and circumstances surrounding the PL Claim and in litigating the matter.  

  

	4.16	Indemnification. The Parties shall negotiate indemnification provisions to be included in the Definitive Agreements. 

  

	5.	INDEMNITY, LIMITATION ON LIABILITY, AND DISCLAIMER 

  

	5.1	Limitation on Liability. Except with respect to breaches of any confidentiality obligations between the Parties, neither Party will be liable for any special, consequential, lost profit, expectation, punitive, or
other indirect damages in connection with any claim arising out of or related to this Agreement, whether grounded in tort (including negligence), strict liability, contract, or otherwise. 

  
 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. 
 Page 10 of 23 

 Confidential 

CONFIDENTIAL TREATMENT REQUESTED 
  

	5.2	Disclaimer. THIS OPTION IS PROVIDED “AS IS”. OTHER THAN AS EXPRESSLY PROVIDED HEREIN, PIERIS DOES NOT MAKE ANY WARRANTIES, EXPRESS OR IMPLIED, STATUTORY OR OTHERWISE, INCLUDING BUT NOT LIMITED TO
WARRANTIES OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, OR TITLE AND NONINFRINGEMENT. 

  

	6.	TERM AND TERMINATION 

  

	6.1	Term. The term of this Agreement, including the Option Rights, (“Term”) begins on the Effective Date and ends on the earlier of: 

 

	 	(a)	ASKA’s written notice to Pieris of ASKA’s decision not to exercise its Option Rights; 

  

	 	(b)	ASKA’s failure to timely deliver a Satisfaction Notice as described in Section 2.2; 

  

	 	(c)	three (3) months from date on which Pieris delivers to ASKA the investigator’s report of the final results of the Phase 2a Study in the European Union; or 

 

	 	(d)	the Parties’ execution of the Definitive Agreements, if any. 

 ASKA agrees to promptly
notify Pieris at any time during the Term if ASKA decides not to exercise its Option Rights. ASKA also agrees to exercise commercially reasonable efforts to provide Pieris with the basis for this determination. 

 

	6.2	Termination by Pieris. Pieris may terminate this Agreement only in the case of material breach by ASKA of the terms of this Agreement. Pieris shall provide written notice of any such breach to ASKA and ASKA shall
have sixty (60) days to cure any such breach prior to termination becoming effective. 

  

	6.3	No Residual Rights. Upon expiration or termination of this Agreement, ASKA will have no residual or other rights in the Licensed Platform IP or Licensed Product IP. 

 

	7.	NOTICES 

 All notices under this Agreement are deemed fully given when written, addressed, and sent as
follows: 
 All general notices to ASKA are e-mailed or mailed to: 

ASKA Pharmaceutical Co., Ltd. 
 2-5-1, Shibaura, Minato-ku 
 Tokyo
108-8532 Japan 
 E-mail: [***] 

Attn: [***] 

  
 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. 
 Page 11 of 23 

 Confidential 

CONFIDENTIAL TREATMENT REQUESTED 
  

 All general notices to Pieris are e-mailed or mailed to: 

Pieris Pharmaceuticals 
 255
State Street, 9th Floor 
 Boston, MA 02109 

Email: [***] 
 Attn:
[***] 
 Either Party may change its address with written notice to the other Party. 

 

	8.	CONFIDENTIALITY & PUBLICITY 

  

	8.1	Confidentiality. The mutual confidential disclosure agreement entered by the Parties [***], (the “CDA”) shall remain in effect after the execution of this Agreement and shall cover the exchange
of any Confidential Information (as defined in the CDA) in connection with this Agreement. This Agreement including its terms shall be treated as Confidential Information under the CDA. 

 

	8.2	Publicity. ASKA and Pieris are authorized to publicly disclose the existence of this Agreement and the Definitive Agreements (if signed). Where disclosure of portions of the terms of this Agreement are required
by law (such as a Form 8-K filing or the filing of a redacted copy of this Agreement as may be required by the U.S. Securities and Exchange Commission), the Party making the disclosure shall provide notice and
the opportunity for the other Party to comment on such disclosure prior to filing. The Parties may make a press release or other announcement disclosing any terms of this Agreement only with the prior written consent of the other Party. Either Party
may make disclosures that includes only information contained in any prior public disclosure without prior permission from the other Party. 

  

	9.	REPRESENTATIONS AND WARRNATIES 

  

	9.1	Mutual Representations and Warranties. Pieris and ASKA each represent and warrant to the other, as of the Effective Date (except as otherwise noted), as follows: 

 

	 	9.1.1	Organization. It is a corporation or company duly organized, validly existing and in good standing under the laws of the jurisdiction of its organization, and has all requisite power and authority, corporate or
otherwise, to execute, deliver and perform 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. 
 Page 12 of 23 

 Confidential 

CONFIDENTIAL TREATMENT REQUESTED 
  

	 	9.1.2	Authorization. The execution and delivery of this Agreement and the performance by it of the transactions contemplated hereby have been duly authorized by all necessary corporate or company action and will not
violate (a) such Party’s certificate of incorporation or bylaws (or equivalent organizational documents), (b) any agreement, instrument or contractual obligation to which such Party is bound in any material respect, (c) any
requirement of any applicable laws, or (d) any order, writ, judgment, injunction, decree, determination or award of any court or governmental agency presently in effect applicable to such Party. 

 

	 	9.1.3	Binding Agreement. This Agreement is a legal, valid and binding obligation of such Party, enforceable against it in accordance with its terms and conditions. 

 

	 	9.1.4	No Inconsistent Obligation. It is not under any obligation, contractual or otherwise, to any Person that conflicts with or is inconsistent in any respect with the terms of this Agreement or that would impede the
diligent and complete fulfillment of its obligations hereunder. 

  

	 	9.1.5	Compliance with Law. During the Term, it will comply, and will ensure that its Affiliates comply, with all local, state, federal and international laws and regulations in all material respects in connection with
its obligations hereunder. 

  

	10.	MISCELLANEOUS 

  

	10.1	Scope of Agreement. This Agreement constitutes the entire agreement between the Parties pertaining to the subject matter hereof. No representative of Pieris or ASKA has been authorized to make any representation,
warranty, or promise not contained herein. 

  

	10.2	Choice of Law. This Agreement shall be governed by and construed in accordance with the laws of [***], without reference to its conflict of laws principles. 

 

	10.3	 Arbitration. In the event of any dispute arising out of or in relation to this Agreement, the Parties will
initially attempt to resolve such dispute through good-faith negotiation between Pieris’ [***] and ASKA’s [***], for a period of not more than [***] following written notification of such dispute to the other Party. If such dispute cannot
be resolved by means of such negotiations during such period, then, such dispute, including any question regarding the existence, validity or termination of the Agreement, shall be referred to and finally resolved by arbitration administered by the
Singapore International Arbitration Centre (“SIAC”) in accordance with the Arbitration Rules of the Singapore International Arbitration Centre (“SIAC Rules”) in force at the time, which rules are deemed to be
incorporated by reference in this clause. The seat of the arbitration shall be Singapore. The language to be used in the arbitration proceedings will be English. The Arbitration will be conducted by one arbitrator to be agreed upon by the Parties.
If the 

  
 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. 
 Page 13 of 23 

 Confidential 

CONFIDENTIAL TREATMENT REQUESTED 
  

	 	
Parties are unable to agree, the arbitrator will be appointed in accordance with SIAC rules. The arbitrator must have at least ten (10) years of experience in biotechnology license
agreements and ten (10) years of experience as an arbitrator and shall be thoroughly familiar with New York law. The arbitrator will have the authority to decide the arbitrability of the dispute and to award fees and expenses, including
reasonable attorney’s fees and the costs of the arbitration, to a Party. The arbitration shall be completed and the award issued within [***] of the appointment of the arbitrator. The Parties agree that all settlement discussions will be
confidential and shall be treated as compromise and settlement negotiations for purposes of applicable rules of evidence. The Parties further agree that the arbitration shall be kept confidential and that the existence of the arbitration proceeding
and any element of it (including but not limited to any pleadings, briefs or other documents submitted or exchanged, any testimony or other oral submissions, and any awards) shall not be disclosed beyond the tribunal, the SIAC, the Parties, their
counsel, accountants and auditors, insurers and re-insurers, and any person or entity necessary to the conduct of the proceeding. The confidentiality obligations in this Section 10.3
shall not apply (i) if disclosure is required by law, or in judicial or administrative proceedings or by financial instruments exchanges, or (ii) as far as disclosure is necessary to enforce the rights arising out of the arbitration award.
The award may be confirmed by any court having jurisdiction. The parties consent to the jurisdiction of the state and federal courts of New York for the confirmation and enforcement of the award. 

 

	10.4	Interim Relief. Without otherwise limiting the requirements imposed by Section 10.3, a Party may seek from any court having jurisdiction any interim or provisional relief provided for by
the laws of New York that may be necessary to protect its interests hereunder, including, without limitation, injunctive relief for a breach or threatened breach of Section 8 pending the resolution of any dispute in
accordance with this Section 10.4. The parties consent to the jurisdiction of the state and federal courts of New York for any interim or provisional relief pursuant to this Section 10.4.

  

	10.5	Non-Assignment. ASKA may not assign or delegate its interests or any of its obligations hereunder without the express prior written approval of Pieris. 

 

	10.6	Headings. No headings in this Agreement affect its interpretation. 

  

	10.7	Electronic Copy. The Parties to this document agree that a copy of the original signature (including an electronic copy) may be used for any and all purposes for which the original signature may have been used.
The Parties further waive any right to challenge the admissibility or authenticity of this document in a court of law based solely on the absence of an original signature. 

[Signature Page Follows] 

  
 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. 
 Page 14 of 23 

 Confidential 

CONFIDENTIAL TREATMENT REQUESTED 
  

 The Parties execute this Agreement in duplicate originals by their duly authorized officers or
representatives. 
  

			
	 PIERIS PHARMACEUTICALS, INC.

		
	 Signature
	 	  

	 Name
	 	 Stephen Yoder

	 Title
	 	 President and CEO

	 Date
	 	  

 

			
	 PIERIS PHARMACEUTICALS GMBH

		
	 Signature
	 	  

	 Name
	 	 Stephen Yoder

	 Title
	 	 Managing Director

	 Date
	 	  

 

			
	 ASKA PHARMACEUTICAL CO., LTD.

		
	 Signature
	 	  

	 Name
	 	 Takashi Yamaguchi, Ph.D.

	 Title
	 	 President and Representative Director

	 Date
	 	  

  
 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. 
 Page 15 of 23 

 Confidential 

CONFIDENTIAL TREATMENT REQUESTED 
  

 EXHIBIT A 

Patent Rights within the Licensed Platform 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. 
 Page 16 of 23 

 Confidential 

CONFIDENTIAL TREATMENT REQUESTED 
  

 EXHIBIT B 

Patent Rights within the Licensed Product 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. 
 Page 17 of 23 

 Confidential 

CONFIDENTIAL TREATMENT REQUESTED 
  

 EXHIBIT C 

Success Criteria for Phase 2a Study 

[***] 

  
 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. 
 Page 18 of 23 

 Confidential 

CONFIDENTIAL TREATMENT REQUESTED 
  

 EXHIBIT D 

The Definitive Agreements, if executed, will include the following upfront and milestone payments, royalties and other terms in consideration of the rights
granted under the Licensed Product IP: 
  

	 	(a)	Up-Front Payment Fee. The Definitive Agreements shall include a [***] Dollar ($[***] USD) up-front payment fee paid by ASKA to
Pieris and due within [***] of the effective date of the Definitive Agreements. 

  

	 	(b)	Initial Indication Development Milestone Payments. The Definitive Agreements shall include the following developmental milestone payments to be paid by ASKA to Pieris: 

 

	 	(i)	[***] Dollars ($[***] USD) upon [***]; 

  

	 	(ii)	[***] Dollars ($[***] USD) upon [***] 

  

	 	(iii)	[***] Dollars ($[***] USD) upon [***] 

  

	 	(iv)	[***] Dollars ($[***] USD) upon [***] 

  

	 	(v)	[***] Dollars ($[***] USD) upon [***] 

  

	 	(c)	Initial Indication Development Milestone Payments for [***]. The Parties shall negotiate in good faith regarding appropriate development milestone payments for development of the Licensed Product in [***], taking
into account relevant factors including market size and sales forecast. 

  

	 	(d)	Additional Indication Development Milestone Payment. In the event that ASKA decides to develop the Licensed Product for Additional Indications, then the parties shall negotiate in good faith regarding the amount
of such development milestone payments, taking into account relevant favors including market size and sales forecast. 

  

	 	(e)	Commercial Milestone Payments. ASKA shall pay Pieris the milestone payments set forth below within [***] after achievement (first occurrence) of the applicable commercial milestone event. For clarity, if multiple
commercial milestone events are achieved in a calendar year, then ASKA shall remit to Pieris the milestone payment for all commercial milestones that are first achieved in such calendar year. 

  
 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. 
 Page 19 of 23 

 Confidential 

CONFIDENTIAL TREATMENT REQUESTED 
  

	 	(i)	[***] Dollars ($[***] USD) (one-time) upon ASKA first achieving [***] Dollars ($[***] USD) annual Net Sales of Licensed Product in the Licensed Territory; 

 

	 	(ii)	[***] Dollars ($[***] USD) (one-time) upon ASKA first achieving [***] Dollars ($[***] USD) annual Net Sales of Licensed Product in the Licensed Territory; 

 

	 	(iii)	[***] Dollars ($[***] USD) (one-time) upon ASKA first achieving [***] Dollars ($[***] USD) annual Net Sales of Licensed Product in the Licensed Territory; 

 

	 	(iv)	[***] Dollars ($[***] USD) (one-time) upon ASKA first achieving [***] Dollars ($[***] USD) annual Net Sales of Licensed Product in the Licensed Territory; 

 

	 	(v)	[***] Dollars ($[***] USD) (one-time) upon ASKA first achieving [***] Dollars ($[***] USD) annual Net Sales of Licensed Product in the Licensed Territory; 

 

	 	(vi)	[***] Dollars ($[***] USD) (one-time) upon ASKA first achieving [***] Dollars ($[***] USD) annual Net Sales of Licensed Product in the Licensed Territory; 

 

	 	(vii)	[***] Dollars ($[***] USD) (one-time) upon ASKA first achieving [***] Dollars ($[***]0 USD) annual Net Sales of Licensed Product in the Licensed Territory; 

 

	 	(viii)	[***] Dollars ($[***] USD) (one-time) upon ASKA first achieving [***] Dollars ($[***] USD) annual Net Sales of Licensed Product in the Licensed Territory. 

 

	 	(f)	Royalties. The Definitive Agreements shall include the following royalties on Net Sales to be paid by ASKA to Pieris during the Royalty Term on a
country-by-country basis within the Licensed Territory: 

  

					
	Aggregate Annual Net Sales Amount	  	Royalty Rate	 
	 Up to [***] USD
	  	 	[	***]% 
	 Between $[***] and $[***] USD
	  	 	[	***]% 
	 Between $[***] and $[***]0 USD
	  	 	[	***]% 
	 In excess of $[***] USD
	  	 	[	***]% 

  
 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. 
 Page 20 of 23 

 Confidential 

CONFIDENTIAL TREATMENT REQUESTED 
  

	 	(g)	Profit Margin Royalty Adjustments. In the event that gross profits associated with the sale of the Licensed Product in a country of the Licensed Territory falls below [***] percent ([***]%) at the time of the
first commercial sale of the Licensed Product or in any subsequent calendar quarter, then the Parties shall discuss in good faith a reduction of royalty burden to Pieris in such country. In the event that gross profits associated with the sale of
the Licensed Product in a country of the Licensed Territory rises above [***] percent ([***]%) at the time of first commercial sale of the Licensed Product or in any subsequent calendar quarter, then the Parties shall discuss in good faith an
increase in the royalty payable to Pieris for sales of the Licensed Product in such country. In the event that royalties are reduced or increased under this section and gross profits are subsequently restored to above [***]% or below [***]% within a
calendar quarter, as applicable, then the royalty rate shall be restored to the level set forth in this agreement. For avoidance of doubt, in case gross profits after such restoration fall again below [***]% or raise above [***]% in any calendar
quarter, the previously agreed reduction or increase shall again become effective. In no event, however, shall royalties to Pieris fall below [***] percent ([***]%) of Net Sales. Gross profit shall be further defined in the Definitive Agreements but
shall essentially be calculated as Net Sales minus the royalties set forth above and minus cost of goods sold (to be defined in the Definitive Agreement) for the Licensed Product. 

 

	 	(h)	Biosimilar Royalty Reductions. The royalty applicable to the Net Sales of a Licensed Product in the Licensed Territory will be reduced by up to: (i) [***] percent ([***]%) if there is one (1) biosimilar
product (to be defined in the Definitive Agreements) for the Licensed Product being commercially sold in the Licensed Territory at the time of such sale; (ii) [***] percent ([***]%) if there are [***] ([***]) biosimilar products for the Licensed
Product being sold in the Licensed Territory at the time of such sale; or (iii) [***] percent ([***]%) if there are [***] ([***]) or more biosimilar products for the Licensed Product being sold in the Licensed Territory at the time of such sale, in
each case, being marketed by a Third Party in the Licensed Territory and where the sales (on a units basis) of at least [***] such generic product exceed [***] ([***]%) of the sales of the Licensed Product (on a units basis) (during the applicable
calendar quarter). The actual percentage reduction adjustment (as above) will be negotiated in good faith by the Parties to reflect the impact of the biosimilar product on ASKA, taking into consideration (i) increased marketing costs incurred
by ASKA in marketing the Licensed Product, (ii) reduced Net Sales of the Licensed Product or reduced growth of total Net Sales of the Licensed Product and (iii) reduced market share of the Licensed Product, in each case, caused by the
entry of such biosimilar product in the Licensed Territory, and in any case not to exceed the applicable cap in reduction set forth above. 

  
 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. 
 Page 21 of 23 

 Confidential 

CONFIDENTIAL TREATMENT REQUESTED 
  

	 	(i)	Supply Price. For as long as Pieris has access, Pieris will supply ASKA with Licensed Product drug substance at a price equal to the fully burdened manufacturing cost (to be defined in the Definitive Agreements)
of such drug substance plus an additional [***] percent ([***]%). 

  
 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. 
 Page 22 of 23 

 Confidential 

CONFIDENTIAL TREATMENT REQUESTED 
  

 EXHIBIT E 

The Definitive Agreements, if executed, will include the following upfront and milestone payments, royalties and other terms in consideration of the rights
granted under the Licensed Platform IP: 
  

	 	(j)	Up-Front Payment Fee. The Definitive Agreements shall include a [***] Dollar ($[***]USD) up-front payment fee paid by ASKA to Pieris
and due within [***] of the effective date of the Definitive Agreements. 

  

	 	(k)	Initial Indication Development Milestone Payments. The Definitive Agreements shall include the following developmental milestone payments to be paid by ASKA to Pieris: 

 

	 	(i)	[***] Dollars ($[***] USD) upon [***]; 

  

	 	(ii)	[***] Dollars ($[***] USD) upon [***]; 

  

	 	(iii)	[***] Dollars ($[***] USD) upon [***]; 

  

	 	(iv)	[***] Dollars ($[***]) upon [***]. 

  

	 	(l)	Royalties. The Definitive Agreements shall include a [***] royalty on Net Sales of the Licensed Product to be paid by ASKA to Pieris during the Royalty Term on a country-by-country basis within the Licensed Territory. 

  

  
 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. 
 Page 23 of 23

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00271-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00271-of-00352.parquet"}]]