Document:

Exhibit
10.5

 

ANNEX
A

 

Processa
pharmaceuticals, inc.

2019 OMNIBUS INCENTIVE PLAN

 

1.
Purposes, History and Effective Date.

 

 (a) Purpose. The Processa Pharmaceuticals, Inc. 2019 Omnibus Incentive Plan has two complementary purposes: (i) to attract and retain outstanding individuals to serve as officers, directors, employees and consultants and (ii) to increase stockholder value by providing Participants incentives to increase stockholder value by offering the opportunity to acquire shares of the Company’s Stock, receive monetary payments based on the value of such Stock, or receive other incentive compensation, on the potentially favorable terms that this Plan provides.

 

(b)
Effective Date. This Plan will become effective, and Awards may be granted under this Plan, on and after the Effective
Date. This Plan will terminate as provided in Section 14.

 

(c)
History. Prior to the Effective Date, the Company had in effect the Heatwurx 2011 Amended and Restated Equity Incentive
Plan (the “Prior Plan”). Upon the Effective Date, the Prior Plan will terminate, and no new awards will be granted
under the Prior Plan, although awards previously granted under the Prior Plan and still outstanding will continue to be subject
to all terms and conditions of the Prior Plan.

 

2.
Definitions. Capitalized terms used and not otherwise defined in this Plan or in any Award agreement
have the following meanings:

 

(a)
“Act” means the Securities Act of 1933, as amended from time to time. Any reference to a specific provision of the
Act shall include any successor provision thereto and the rules and regulations promulgated under such provision.

 

(b)
“Administrator” means the Board or the Committee; provided that, to the extent the Board or the Committee has
delegated authority and responsibility as an Administrator of the Plan to one or more committees or officers of the Company as
permitted by Section 3(b), the term “Administrator” shall also mean such committee(s) and/or officer(s) to the extent
of such delegation.

 

(c)
“Affiliate” has the meaning ascribed to such term in Rule 12b-2 under the Exchange Act. Notwithstanding the foregoing,
for purposes of determining those individuals to whom an Option or a Stock Appreciation Right that is exempt from Code Section
409A may be granted, the term “Affiliate” means any entity that, directly or through one or more intermediaries, is
controlled by or is under common control with, the Company within the meaning of Code Sections 414(b) or (c); provided that,
in applying such provisions, the phrase “at least 20 percent” shall be used in place of “at least 80 percent”
each place it appears therein.

 

(d)
“Award” means a grant of Options, Stock Appreciation Rights, Performance Units, Stock, Restricted Stock, Restricted
Stock Units, a Cash Incentive Award, Dividend Equivalent Units or any other type of award permitted under this Plan.

 

(e)
“Beneficial Owner” means a Person, with respect to any securities which:

 

(i)
such Person or any of such Person’s Affiliates has the right to acquire (whether such right is exercisable immediately or
only after the passage of time) pursuant to any agreement, arrangement or understanding, or upon the exercise of conversion rights,
exchange rights, rights, warrants or options, or otherwise; provided, however, that a Person shall not be deemed the Beneficial
Owner of, or to beneficially own, securities tendered pursuant to a tender or exchange offer made by or on behalf of such Person
or any of such Person’s Affiliates until such tendered securities are accepted for purchase; or

 

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(ii)
such Person or any of such Person’s Affiliates, directly or indirectly, has the right to vote or dispose of or has “beneficial
ownership” of (as determined pursuant to Rule 13d-3 of the General Rules and Regulations under the Act), including pursuant
to any agreement, arrangement or understanding; provided, however, that a Person shall not be deemed the Beneficial Owner
of, or to beneficially own, any security under this clause (ii) as a result of an agreement, arrangement or understanding to vote
such security if the agreement, arrangement or understanding: (A) arises solely from a revocable proxy or consent given to such
Person in response to a public proxy or consent solicitation made pursuant to, and in accordance with, the applicable rules and
regulations under the Act and (B) is not also then reportable on a Schedule 13D under the Act (or any comparable or successor
report); or

 

(iii)
are beneficially owned, directly or indirectly, by any other Person with which such Person or any of such Person’s Affiliates
has any agreement, arrangement or understanding for the purpose of acquiring, holding, voting (except pursuant to a revocable
proxy as described in clause (ii) above) or disposing of any voting securities of the Company.

 

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

 

(g)
“Cash Incentive Award” means the right to receive a cash payment to the extent Performance Goals are achieved as described
in Section 10.

 

(h)
“Cause” has the meaning given in a Participant’s employment, retention, change of control, severance, Award
agreement or similar agreement with the Company or any Affiliate, or if no such agreement is in effect or does not include a definition
of “Cause,” then (i) if the determination of Cause is being made prior to a Change of Control, Cause has the meaning
given in the Company’s employment policies as in effect at the time of the determination or (ii) if the determination of
Cause is being made following a Change of Control, Cause has the meaning given in the Company’s employment policies as in
effect immediately prior to the Change of Control.

 

(i)
“Change of Control” means, unless specified otherwise in an Award agreement, the first to occur of any of the following
with respect to the Company or any upstream holding company (which, for purposes of this definition, shall be included in references
to the Company):

 

(i)
any Person (but excluding the Company, any trustee or other fiduciary holding securities under an employee benefit plan of the
Company, or any corporation owned, directly or indirectly, by the stockholders of the Company in substantially the same proportions
as their ownership of stock of the Company) is or becomes the Beneficial Owner, directly or indirectly, of securities of the Company
representing thirty-five percent (35%) or more of the combined voting power of the Company’s then outstanding securities;
or

 

(ii)
the Company is merged or consolidated with any other corporation or other entity, other than: (A) a merger or consolidation which
would result in the voting securities of the Company outstanding immediately prior thereto continuing to represent (either by
remaining outstanding or by being converted into voting securities of the surviving entity) more than fifty percent (50%) of the
combined voting power of the voting securities of the Company or such surviving entity outstanding immediately after such merger
or consolidation; or (B) the Company engages in a merger or consolidation effected to implement a recapitalization of the Company
(or similar transaction) in which no Person acquires thirty-five percent (35%) or more of the combined voting power of the Company’s
then outstanding securities. Notwithstanding the foregoing, a merger or consolidation involving the Company shall not be considered
a “Change of Control” if the Company is the surviving corporation and the shares of Stock are not converted into or
exchanged for stock or securities of any other corporation, cash or any other thing of value, unless Persons who Beneficially
Owned the Shares outstanding immediately prior to such transaction Beneficially Own less than a majority of the outstanding voting
securities of the Company immediately following the merger or consolidation;

 

(iii)
the sale or disposition of all or substantially all of the Company’s assets (in one transaction or a series of related transactions
within any period of 24 consecutive months) other than a sale or distribution of all or substantially all of the Company’s
assets to any entity of which at least seventy-five percent (75%) of the combined voting power of the voting securities are owned
by Persons in substantially the same proportions as their ownership of the Company immediately prior to such sale;

 

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(iv)
the Company dissolves and liquidates substantially all of its assets; or

 

(v)
at any time after the Effective Date, the “Continuing Directors” cease to constitute a majority of the Board. For
this purpose, a “Continuing Director” shall mean: (A) the individuals who, at the Effective Date, constitute the Board;
and (B) any new Directors (other than Directors designated by a person who has entered into an agreement with the Company to effect
a transaction described in clause (i), (ii), or (iii) of this definition) whose appointment to the Board or nomination for election
by Company stockholders was approved by a vote of at least two-thirds of the then-serving Continuing Directors.

Notwithstanding
the foregoing, in order to ensure compliance with Code Section 409A when applicable, the foregoing definition shall be deemed
amended to the minimum extent necessary to comply with Code Section 409A.

 

(j)
“Code” means the Internal Revenue Code of 1986, as amended. Any reference to a specific provision of the Code includes
any successor provision and the regulations promulgated under such provision.

 

(k)
“Committee” means the Compensation Committee of the Board, any successor committee thereto or such other committee
of the Board that is designated by the Board with the same or similar authority. The Committee shall consist only of Non-Employee
Directors (not fewer than two (2)) who, to the extent necessary for the Plan to comply with Rule 16b-3 promulgated under the Exchange
Act, meet the requirements of a “non-employee director” as defined in Rule 16b-3.

 

(l)
“Company” means Processa Pharmaceuticals, Inc., a Delaware corporation, or any successor thereto.

 

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

 

(n)
“Dividend Equivalent Unit” means the right granted in connection with Restricted Stock Units or Performance Units,
to receive a payment, in cash or Shares, equal to the cash dividends or other cash distributions paid with respect to a Share.

 

(o)
“Effective Date” means the date the Company’s stockholders approve this Plan.

 

(p)
“Exchange Act” means the Securities Exchange Act of 1934, as amended. Any reference to a specific provision of the
Exchange Act includes any successor provision and the regulations and rules promulgated under such provision.

 

(q)
“Fair Market Value” means, unless otherwise determined by the Administrator, per Share on a particular date:

 

(i)
if the Stock is listed on any established stock exchange or traded on any established market, the closing sales price of a Share
as quoted on such exchange or market (or the exchange or market with the greatest volume of trading in the Stock) on such date,
as reported in such source as the Administrator deems reliable. Unless otherwise provided by the Administrator, if there is no
closing sales price for the Stock on the date of determination, then the Fair Market Value will be the closing sales price (or
closing bid if no sales were reported) on the last preceding date for which such quotation exists; or

 

(ii)
if the Stock is not listed on any exchange or traded on any established market, then the Fair Market Value will be determined
by the Administrator in compliance with Code Section 409A and, in the case of an incentive stock option, in compliance with Code
Section 422.

 

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Notwithstanding
the foregoing, in the case of a sale of Shares, the actual sale price shall be the Fair Market Value of such Shares.

 

(r)
“Good Reason” has the meaning given in a Participant’s employment, retention, change of control, severance,
Award agreement or similar agreement with the Company or any Affiliate, or if no such agreement is in effect or does not include
a definition of “Good Reason,” then the occurrence of any of the following events, without the Participant’s
advance written consent:

 

(i)
a material reduction in the Participant’s base salary or cash bonus opportunity;

 

(ii)
a material adverse change in the Participant’s duties, responsibilities, authority, title, status or reporting structure;
or

 

(iii)
a geographical relocation of the Participant’s principal office location by more than fifty (50) miles that increases the
distance of the Participant’s commute.

 

A
Participant’s Termination shall not be considered to have occurred for “Good Reason” unless (A) within ninety
(90) days following the occurrence of one of the events listed above the Participant provides written notice to the Company setting
forth the specific event constituting Good Reason, (B) the Company fails to remedy the event constituting Good Reason within thirty
(30) days following its receipt of the Participant’s notice, and (C) the Participant actually terminates his or her employment
with the Company and its Affiliates within thirty (30) days following the end of the Company’s remedy period.

 

(s)
“Non-Employee Director” means a Director who is not also an employee of the Company or its Subsidiaries.

 

(t)
“Option” means the right to purchase Shares at a stated price for a specified period of time.

 

(u)
“Participant” means an individual selected by the Administrator to receive an Award.

 

(v)
“Performance Goals” means any objective or subjective goals selected by the Administrator to measure the level of
performance and determine the payout or vesting of an Award. Performance Goals may include, but are not limited to, the performance
of the Company or any one or more of its Subsidiaries, Affiliates or other business units with respect to the following measures
(singly or in combination): net sales; cost of sales; revenue; gross income; net income; operating income; income from continuing
operations; earnings (including before taxes, and/or interest and/or depreciation and amortization); earnings per share (including
diluted earnings per share); price per share; cash flow; net cash provided by operating activities; net cash provided by operating
activities less net cash used in investing activities; net operating profit; ratio of debt to debt plus equity; return on stockholder
equity; return on capital; return on assets; operating working capital; average accounts receivable; economic value added; total
stockholder return; customer satisfaction; operating margin; profit margin; sales performance; sales quota attainment; new sales;
cross/integrated sales; customer engagement; internal revenue growth; client retention; the achievement of research, production,
or regulatory approval milestones; achievement of merger or acquisition milestones (including but not limited to identification
of acquisition candidates). Performance goals may also relate to a Participant’s individual performance.

 

The
Administrator reserves the right to adjust Performance Goals, or modify the manner of measuring or evaluating a Performance Goal,
for any reason the Administrator determines is appropriate, including but not limited to: (i) by excluding the effects of charges
for reorganizing and restructuring; discontinued operations; asset write-downs; gains or losses on the disposition of a business;
or mergers, acquisitions or dispositions; and extraordinary, unusual and/or non-recurring items of gain or loss; (ii) excluding
the costs of litigation, claims, judgments or settlements; (iii) excluding the effects of changes in laws or regulations affecting
reported results, or changes in tax or accounting principles, regulations or law; and (iv) excluding any accruals of amounts related
to payments under the Plan or any other compensation arrangement maintained by the Company or an Affiliate.

 

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The
inclusion in an Award agreement of specific adjustments or modifications shall not be deemed to preclude the Administrator from
making other adjustments or modifications, in its discretion, as described herein, unless the Award agreement provides that the
adjustments or modifications described in such agreement shall be the sole adjustments or modifications.

 

(w)
“Performance Unit” means the right to receive a cash payment and/or Shares valued in relation to a unit that has a
designated dollar value or the value of which is equal to the Fair Market Value of one or more Shares, to the extent Performance
Goals are achieved (and the other requirements described in the Award agreement, if any, are met).

 

(x)
“Person” has the meaning given in Section 3(a)(9) of the Exchange Act as modified and used in Section 13(d) and 14(d)
thereof, or any group of Persons acting in concert.

 

(y)
“Plan” means this Processa Pharmaceuticals 2019 Omnibus Incentive Plan, as it may be amended from time to time.

 

(z)
“Restricted Stock” means Shares that are subject to a risk of forfeiture or restrictions on transfer, or both, which
may lapse upon the achievement or partial achievement of Performance Goals or upon the completion of a period of service, or both.

 

(aa)
“Restricted Stock Unit” means the right to receive a Share or a cash payment, the value of which is equal to the Fair
Market Value of one Share.

 

(bb)
“Section 16 Participants” means Participants who are subject to the provisions of Section 16 of the Exchange Act.

 

(cc)
“Share” means a share of Stock.

 

(dd)
“Stock” means the common stock of the Company, par value $0.0001 per share.

 

(ee)
“Stock Appreciation Right” or “SAR” means the right to receive a cash payment, and/or Shares with a Fair
Market Value, equal to the appreciation of the Fair Market Value of a Share during a specified period of time.

 

(ff)
“Subsidiary” means any corporation, limited liability company or other limited liability entity in an unbroken chain
of entities beginning with the Company if each of the entities (other than the last entities in the chain) owns the stock or equity
interest possessing more than fifty percent (50%) of the total combined voting power of all classes of stock or other equity interests
in one of the other entities in the chain.

 

(gg)
“Termination” means cessation of employment by, or service to, the Company or an Affiliate for any reason. Unless
determined otherwise by the Administrator, for purposes of the Plan and all Awards, the following rules shall apply:

 

(i)
the date of a Participant’s Termination shall be the date the Participant ceases to perform services for the Company or
an Affiliate, without regard to whether the Participant thereafter continues to receive any compensatory payments or is paid salary
in lieu of notice of Termination, and shall disregard any notice or severance period that the Participant may be entitled to receive;

 

(ii)
a Participant who transfers employment between the Company and its Affiliates, or between Affiliates, will not be considered to
have experienced a Termination;

 

(iii)
a Participant who ceases to be a Non-Employee Director because he or she becomes an employee of the Company or an Affiliate shall
not be considered to have ceased service as a Director with respect to any Award until such Participant’s Termination with
the Company and its Affiliates;

 

(iv)
a Participant who ceases to be employed by the Company or an Affiliate and immediately thereafter becomes a Non-Employee Director,
a non-employee director of an Affiliate, or a consultant to the Company or any Affiliate shall not be considered to have experienced
a Termination until such Participant’s service as a director of, or consultant to, the Company and its Affiliates has ceased;
and

 

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(v)
a Participant employed by an Affiliate will be considered to have experienced a Termination when such entity ceases to be an Affiliate.

 

Notwithstanding
the foregoing, for purposes of an Award that is subject to Code Section 409A, if a Participant’s Termination triggers the
payment of compensation under such Award, then the Participant will be deemed to have experienced a Termination upon their “separation
from service” within the meaning of Code Section 409A. Notwithstanding any other provision in this Plan or an Award to the
contrary, if any Participant is a “specified employee” within the meaning of Code Section 409A as of the date of their
“separation from service” within the meaning of Code Section 409A, then, to the extent required by Code Section 409A,
any payment made to the Participant on account of such separation from service shall not be made before a date that is six months
after the date of the separation from service.

 

3.
Administration.

 

(a)
Administration. In addition to the authority specifically granted to the Administrator in this Plan, the Administrator
has full discretionary authority to administer this Plan, including but not limited to the authority to: (i) interpret the provisions
of this Plan or any agreement covering an Award; (ii) prescribe, amend and rescind rules and regulations relating to this Plan;
(iii) correct any defect, supply any omission, or reconcile any inconsistency in the Plan, any Award or any agreement covering
an Award in the manner and to the extent it deems desirable to carry this Plan or such Award into effect; and (iv) make all other
determinations necessary or advisable for the administration of this Plan. All Administrator determinations shall be made in the
sole discretion of the Administrator and are final and binding on all interested parties.

 

(b)
Delegation to Other Committees or Officers. To the extent applicable law permits, the Board may delegate to another committee
of the Board, or the Committee may delegate to either a subcommittee consisting of one or more Committee members or to one or
more officers of the Company, any or all of their respective authority and responsibility as an Administrator of the Plan; provided
that no such delegation is permitted with respect to Stock-based Awards made to Section 16 Participants at the time any such
delegated authority or responsibility is exercised unless the delegation is to another committee of the Board or sub-committee
of the Committee consisting entirely of Non-Employee Directors who also qualify as “non-employee directors” within
the meaning of Rule 16b-3 of the Exchange Act. If the Board or the Committee has made such a delegation, then all references to
the Administrator in this Plan include such other committee or one or more officers to the extent of such delegation.

 

(c)
No Liability; Indemnification. No member of the Board or the Committee, and no officer or member of any other committee
to whom a delegation under Section 3(b) has been made, will be liable for any act done, or determination made, by the individual
in good faith with respect to the Plan or any Award. The Company will indemnify and hold harmless each such individual as to any
acts or omissions, or determinations made, in each case done or made in good faith, with respect to this Plan or any Award to
the maximum extent that the law and the Company’s By-Laws permit.

 

4.
Eligibility. The Administrator may designate any of the following as a Participant from time
to time, to the extent of the Administrator’s authority: any officer or other employee of the Company or its Affiliates;
any individual that the Company or an Affiliate has engaged to become an officer or employee; any consultant or advisor who provides
services to the Company or its Affiliates; or any Director, including a Non-Employee Director. The Administrator’s designation
of, or granting of an Award to, a Participant will not require the Administrator to designate such individual as a Participant
or grant an Award to such individual at any future time. The Administrator’s granting of a particular type of Award to a
Participant will not require the Administrator to grant any other type of Award to such individual.

 

5.
Types of Awards. Subject to the terms of this Plan, the Administrator may grant any type of
Award to any Participant it selects, but only employees of the Company or a Subsidiary may receive grants of incentive stock options
within the meaning of Code Section 422. Awards may be granted alone or in addition to, in tandem with, or (subject to the prohibition
on repricing set forth in Section 14(e)) in substitution for any other Award (or any other award granted under another plan of
the Company or any Affiliate, including the plan of an acquired entity).

 

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6.
Shares Reserved under this Plan.

 

(a)
Plan Reserve. Subject to adjustment as provided in Section 16, an aggregate of 3,500,000 Shares are reserved for issuance
under this Plan, all of which may be issued pursuant to the exercise of incentive stock options. The Shares reserved for issuance
may be either authorized and unissued Shares or Shares reacquired at any time and now or hereafter held as treasury stock.

 

(b)
Depletion of Reserve. The aggregate number of Shares reserved under Section 6(a) shall be depleted on the date of grant
of an Award by the maximum number of Shares, if any, that may become payable with respect to such Award. For the sake of clarity,
an Award that may be settled solely in cash shall not cause any depletion of the Plan’s Share reserve at the time such Award
is granted.

 

(c)
Replenishment of Reserve.
If (i) an Award lapses, expires, terminates or is cancelled without the issuance of Shares under the Award (whether due currently
or on a deferred basis) or is settled in cash, (ii) it is determined during or at the conclusion of the term of an Award that
all or some portion of the Shares with respect to which the Award was granted will not be issuable on the basis that the conditions
for such issuance will not be satisfied, (iii) Shares are forfeited under an Award, or (iv) Shares are issued under any Award
and the Company subsequently reacquires them pursuant to rights reserved upon the issuance of the Shares, then such Shares shall
be recredited to the Plan’s reserve and may again be used for new Awards under this Plan, but Shares recredited to the Plan’s
reserve pursuant to clause (iv) may not be issued pursuant to incentive stock options. Notwithstanding the foregoing, in no event
shall the following Shares be recredited to the Plan’s reserve: (A) Shares purchased by the Company using proceeds from
Option exercises; (B) Shares tendered or withheld in payment of the exercise price of an Option or as a result of the net settlement
of an outstanding Stock Appreciation Right; or (C) Shares tendered or withheld to satisfy federal, state or local tax withholding
obligations.

 

7.
Options. Subject to the terms of this Plan, the Administrator will determine all terms and conditions
of each Option, including but not limited to: (a) whether the Option is an “incentive stock option” which meets the
requirements of Code Section 422, or a “nonqualified stock option” which does not meet the requirements of Code Section
422; (b) the grant date, which may not be any day prior to the date that the Administrator approves the grant; (c) the number
of Shares subject to the Option; (d) the exercise price, which may never be less than the Fair Market Value of the Shares subject
to the Option as determined on the date of grant; (e) the terms and conditions of vesting and exercise; (f) the term, except that
an Option must terminate no later than ten (10) years after the date of grant; and (g) the manner of payment of the exercise price.
In all other respects, the terms of any incentive stock option should comply with the provisions of Code Section 422 except to
the extent the Administrator determines otherwise. If an Option that is intended to be an incentive stock option fails to meet
the requirements thereof, the Option shall automatically be treated as a nonqualified stock option to the extent of such failure.
To the extent permitted by the Administrator, and subject to such procedures as the Administrator may specify, the payment of
the exercise price of Options may be made by (w) delivery of cash or other Shares or other securities of the Company (including
by attestation) having a then Fair Market Value equal to the purchase price of such Shares, (x) by delivery to the Company or
its designated agent of an executed irrevocable option exercise form together with irrevocable instructions to a broker-dealer
to sell or margin a sufficient portion of the Shares and deliver the sale or margin loan proceeds directly to the Company to pay
for the exercise price, (y) by surrendering the right to receive Shares otherwise deliverable to the Participant upon exercise
of the Award having a Fair Market Value at the time of exercise equal to the total exercise price, or (z) by any combination of
(w), (x) and/or (y). Except to the extent otherwise set forth in an Award agreement, a Participant shall have no rights as a holder
of Stock as a result of the grant of an Option until the Option is exercised, the exercise price and applicable withholding taxes
are paid and the Shares subject to the Option are issued thereunder.

 

8.
Stock Appreciation Rights. Subject to the terms of this Plan, the Administrator will determine
all terms and conditions of each SAR, including but not limited to: (a) the grant date, which may not be any day prior to the
date that the Administrator approves the grant; (b) the number of Shares to which the SAR relates; (c) the grant price, which
may never be less than the Fair Market Value of the Shares subject to the SAR as determined on the date of grant; (d) the terms
and conditions of exercise or maturity, including vesting; (e) the term, provided that an SAR must terminate no later than
ten (10) years after the date of grant; and (f) whether the SAR will be settled in cash, Shares or a combination thereof.

 

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9.
Performance and Stock Awards. Subject to the terms of this Plan, the Administrator will determine
all terms and conditions of each award of Shares, Restricted Stock, Restricted Stock Units or Performance Units, including but
not limited to: (a) the number of Shares and/or units to which such Award relates; (b) whether, as a condition for the Participant
to realize all or a portion of the benefit provided under the Award, one or more Performance Goals must be achieved during such
period as the Administrator specifies; (c) the length of the vesting and/or performance period and, if different, the date on
which payment of the benefit provided under the Award will be made; (d) with respect to Performance Units, whether to measure
the value of each unit in relation to a designated dollar value or the Fair Market Value of one or more Shares; and (e) with respect
to Restricted Stock Units and Performance Units, whether to settle such Awards in cash, in Shares (including Restricted Stock),
or in a combination of cash and Shares.

 

10.
Cash Incentive Awards. Subject to the terms of this Plan, the Administrator will determine all
terms and conditions of a Cash Incentive Award, including but not limited to the Performance Goals, performance period, the potential
amount payable, and the timing of payment.

 

11.
Dividends and Dividend Equivalent Units.

 

(a)
Subject to the terms of this Plan, the Administrator will determine all terms and conditions of each award of Dividend Equivalent
Units, including but not limited to whether: (i) payment of the Award will be made concurrently with dividend payments or credited
to an account for the Participant which provides for the deferral of such amounts until a stated time; (ii) the Award will be
settled in cash or Shares; and (iii) as a condition for the Participant to realize all or a portion of the benefit provided under
the Award, the same vesting or performance requirements applicable to the related Award must be achieved.

 

(b)
Notwithstanding anything in the Plan or an Award to the contrary, no dividends or Dividend Equivalent Units may be paid with respect
to an Award that is subject to Performance Goals unless and until such Performance Goals have been satisfied.

 

12.
Other Stock-Based Awards. Subject to the terms of this Plan, the Administrator may grant to
a Participant other Stock-based Awards, including shares of unrestricted Stock, as replacement for other compensation to which
the Participant is entitled, such as in payment of director fees, in lieu of cash compensation, in exchange for cancellation of
a compensation right, or as a bonus.

 

13.
Transferability. Awards are not transferable other than by will or the laws of descent
and distribution, unless and to the extent the Administrator allows a Participant to: (a) designate in writing a beneficiary to
exercise the Award or receive payment under the Award after the Participant’s death; (b) transfer an Award to the former
spouse of the Participant as required by a domestic relations order incident to a divorce; or (c) otherwise transfer an Award;
provided, however, that with respect to clause (c) above the Participant may not receive consideration for transferring
the Award.

 

14.
Termination and Amendment of Plan; Amendment, Modification or Cancellation of Awards.

 

(a)
Term of Plan. Unless the Board earlier terminates this Plan pursuant to Section 14(b), this Plan will terminate when all
Shares reserved for issuance have been issued. If the term of this Plan extends beyond ten (10) years from the Effective Date,
no incentive stock options may be granted after such time unless the stockholders of the Company have approved an extension of
this Plan for such purpose.

 

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(b)
Termination and Amendment. The Board or the Administrator may amend, alter, suspend, discontinue or terminate this Plan
at any time, subject to the following limitations:

 

(i)
the Board must approve any amendment of this Plan to the extent the Company determines such approval is required by: (A) prior
action of the Board, (B) applicable corporate law, or (C) any other applicable law; and

 

(ii)
stockholders must approve any amendment of this Plan to the extent the Company determines such approval is required by: (A) Section
16 of the Exchange Act, (B) the Code, (C) the listing requirements of any principal securities exchange or market on which the
Shares are then traded, or (D) any other applicable law. Such amendments include, but are not limited to, an amendment to materially
increase the number of Shares reserved under Section 6(a) (except as permitted by Section 16) or an amendment that would diminish
the protections afforded by Section 14(e).

 

(c)
Amendment, Modification, Cancellation and Disgorgement of Awards.

 

(i)
Except as provided in Section 14(e) and subject to the requirements of this Plan, the Administrator may modify, amend or cancel
any Award, or waive any restrictions or conditions applicable to any Award or the exercise of the Award; provided that,
except as otherwise provided in the Plan or the Award agreement, any modification or amendment that materially diminishes the
rights of the Participant, or the cancellation of an Award, shall be effective only if agreed to by the Participant or any other
person(s) as may then have an interest in such Award, but the Administrator need not obtain Participant (or other interested party)
consent for the modification, amendment or cancellation of an Award pursuant to the provisions of subsection (ii) or Section 16
or as follows: (A) to the extent the Administrator deems such action necessary to comply with any applicable law or the listing
requirements of any principal securities exchange or market on which the Shares are then traded; (B) to the extent the Administrator
deems necessary to preserve favorable accounting or tax treatment of any Award for the Company; or (C) to the extent the Administrator
determines that such action does not materially and adversely affect the value of an Award or that such action is in the best
interest of the affected Participant (or any other person(s) as may then have an interest in the Award). Notwithstanding the foregoing,
unless determined otherwise by the Administrator, any such amendment shall be made in a manner that will enable an Award intended
to be exempt from Code Section 409A to continue to be so exempt, or to enable an Award intended to comply with Code Section 409A
to continue to so comply.

 

(ii)
Notwithstanding anything to the contrary in an Award agreement, the Administrator shall have full power and authority to terminate
or cause the Participant to forfeit the Award, and require the Participant to disgorge to the Company any gains attributable to
the Award, if the Participant engages in any action constituting, as determined by the Administrator in its discretion, Cause
for Termination, or a breach of any Award agreement or any other agreement between the Participant and the Company or an Affiliate
concerning noncompetition, nonsolicitation, confidentiality, trade secrets, intellectual property, nondisparagement or similar
obligations.

 

(iii)
Any Awards granted pursuant to this Plan, and any Stock issued or cash paid pursuant to an Award, shall be subject to any recoupment
or clawback policy that is adopted by, or any recoupment or similar requirement otherwise made applicable by law, regulation or
listing standards to, the Company from time to time.

 

(d)
Survival of Authority and Awards. Notwithstanding the foregoing, the authority of the Board and the Administrator under
this Section 14 and to otherwise administer the Plan with respect to then-outstanding Awards will extend beyond the date of this
Plan’s termination. In addition, termination of this Plan will not affect the rights of Participants with respect to Awards
previously granted to them, and all unexpired Awards will continue in force and effect after termination of this Plan except as
they may lapse or be terminated by their own terms and conditions.

 

(e)
Repricing and Backdating Prohibited. Notwithstanding anything in this Plan to the contrary, and except for the adjustments
provided for in Section 16, neither the Administrator nor any other person may (i) amend the terms of outstanding Options or SARs
to reduce the exercise or grant price of such outstanding Options or SARs; (ii) cancel outstanding Options or SARs in exchange
for Options or SARs with an exercise or grant price that is less than the exercise or grant price of the original Options or SARs;
or (iii) cancel outstanding Options or SARs with an exercise or grant price above the current Fair Market Value of a Share in
exchange for cash or other securities. In addition, the Administrator may not make a grant of an Option or SAR with a grant date
that is effective prior to the date the Administrator takes action to approve such Award.

 

    	 	A-9	 

    	 

    

 

(f)
Foreign Participation. To assure the viability of Awards granted to Participants employed or residing in foreign countries,
the Administrator may provide for such special terms as it may consider necessary or appropriate to accommodate differences in
local law, tax policy, accounting or custom. Moreover, the Administrator may approve such supplements to, or amendments, restatements
or alternative versions of, this Plan as it determines is necessary or appropriate for such purposes. Any such amendment, restatement
or alternative versions that the Administrator approves for purposes of using this Plan in a foreign country will not affect the
terms of this Plan for any other country. In addition, all such supplements, amendments, restatements or alternative versions
must comply with the provisions of Section 14(b)(ii).

 

15.
Taxes.

 

(a)
Withholding. In the event the Company or one of its Affiliates is required to withhold any Federal, state or local taxes
or other amounts in respect of any income recognized by a Participant as a result of the grant, vesting, payment or settlement
of an Award or disposition of any Shares acquired under an Award, the Company may satisfy such obligation by:

 

(i)
if cash is payable under an Award, deducting (or requiring an Affiliate to deduct) from such cash payment the amount needed to
satisfy such obligation;

 

(ii)
if Shares are issuable under an Award, then to the extent previously approved by the Administrator (which approval may be set
forth in an Award agreement or in administrative rules) (A) withholding Shares having a Fair Market Value equal to such obligations;
or (B) allowing the Participant to elect to (1) have the Company or its Affiliate withhold Shares otherwise issuable under the
Award, (2) tender back Shares received in connection with such Award or (3) deliver other previously owned Shares, in each case
having a Fair Market Value equal to the amount to be withheld; provided that the amount to be withheld under this clause (ii)
may not exceed the total maximum statutory tax withholding obligations associated with the transaction to the extent needed for
the Company and its Affiliates to avoid an accounting charge. If an election is provided, the election must be made on or before
the date as of which the amount of tax to be withheld is determined and otherwise as the Administrator requires; or

 

(iii)
deducting (or requiring an Affiliate to deduct) the amount needed to satisfy such obligation from any wages or other payments
owed to the Participant, requiring such Participant to pay to the Company or its Affiliate, in cash, promptly on demand, or make
other arrangements satisfactory to the Company or its Affiliate regarding the payment to the Company or its Affiliate of the amount
needed to satisfy such obligation.

 

(b)
No Guarantee of Tax Treatment. Notwithstanding any provisions of this Plan to the contrary, the Company does not guarantee
to any Participant or any other Person with an interest in an Award that (i) any Award intended to be exempt from Code Section
409A shall be so exempt, (ii) any Award intended to comply with Code Section 409A or Code Section 422 shall so comply, or (iii)
any Award shall otherwise receive a specific tax treatment under any other applicable tax law, nor in any such case will the Company
or any Affiliate be required to indemnify, defend or hold harmless any individual with respect to the tax consequences of any
Award.

 

    	 	A-10	 

    	 

    

 

16.
Adjustment and Change of Control Provisions.

 

(a)
Adjustment of Shares. If (i) the Company shall at any time be involved in a merger or other transaction in which the Shares
are changed or exchanged; (ii) the Company shall subdivide or combine the Shares or the Company shall declare a dividend payable
in Shares, other securities (other than stock purchase rights issued pursuant to a stockholder rights agreement) or other property;
(iii) the Company shall effect a cash dividend the amount of which, on a per Share basis, exceeds ten percent (10%) of the Fair
Market Value of a Share at the time the dividend is declared, or the Company shall effect any other dividend or other distribution
on the Shares in the form of cash, or a repurchase of Shares, that the Board determines by resolution is special or extraordinary
in nature or that is in connection with a transaction that the Company characterizes publicly as a recapitalization or reorganization
involving the Shares; or (iv) any other event shall occur, which, in the case of this clause (iv), in the judgment of the Administrator
necessitates an adjustment to prevent dilution or enlargement of the benefits or potential benefits intended to be made available
under this Plan, then the Administrator shall, in such manner as it may deem equitable to prevent dilution or enlargement of the
benefits or potential benefits intended to be made available under this Plan, adjust any or all of: (A) the number and type of
Shares subject to this Plan (as described in Section 6(a)) and which may after the event be made the subject of Awards; (B) the
number and type of Shares subject to outstanding Awards; (C) the grant, purchase, or exercise price with respect to any Award;
and (D) the Performance Goals of an Award. In any such case, the Administrator may also (or in lieu of the foregoing) make provision
for a cash payment to the holder of an outstanding Award in exchange for the cancellation of all or a portion of the Award (without
the consent of the holder of an Award) in an amount determined by the Administrator effective at such time as the Administrator
specifies (which may be the time such transaction or event is effective). However, in each case, with respect to Awards of incentive
stock options, no such adjustment may be authorized to the extent that such authority would cause this Plan to violate Code Section
422(b). Further, the number of Shares subject to any Award payable or denominated in Shares must always be a whole number. In
any event, previously granted Options or SARs are subject to only such adjustments as are necessary to maintain the relative proportionate
interest the Options and SARs represented immediately prior to any such event and to preserve, without exceeding, the value of
such Options or SARs.

 

Without
limitation, in the event of any reorganization, merger, consolidation, combination or other similar corporate transaction or event,
whether or not constituting a Change of Control (other than any such transaction in which the Company is the continuing corporation
and in which the outstanding Stock is not being converted into or exchanged for different securities, cash or other property,
or any combination thereof), the Administrator may substitute, on an equitable basis as the Administrator determines, for each
Share then subject to an Award and the Shares subject to this Plan (if the Plan will continue in effect), the number and kind
of shares of stock, other securities, cash or other property to which holders of Stock are or will be entitled in respect of each
Share pursuant to the transaction.

 

Notwithstanding
the foregoing, in the case of a stock dividend (other than a stock dividend declared in lieu of an ordinary cash dividend) or
subdivision or combination of the Shares (including a reverse stock split), if no action is taken by the Administrator, adjustments
contemplated by this subsection that are proportionate shall nevertheless automatically be made as of the date of such stock dividend
or subdivision or combination of the Shares.

 

(b)
Issuance or Assumption. Notwithstanding any other provision of this Plan, and without affecting the number of Shares otherwise
reserved or available under this Plan, in connection with any merger, consolidation, acquisition of property or stock, or reorganization,
the Administrator may authorize the issuance or assumption of awards under this Plan upon such terms and conditions as it may
deem appropriate.

 

(c)
Effect of a Change of Control. To the extent a Participant has in effect an employment, retention, change of control, severance
or similar agreement with the Company or any Affiliate that discusses the effect of a Change of Control on the Participant’s
Awards, such agreement shall control. In all other cases, unless provided otherwise in an Award agreement or by the Administrator
prior to the date of the Change of Control, in the event of a Change of Control:

 

(i)
If the purchaser, successor or surviving entity (or parent thereof) so agrees, some or all outstanding Awards shall be assumed,
or replaced with the same type of award with similar terms and conditions, by the purchaser, successor or surviving entity (or
parent thereof) in the Change of Control transaction. If applicable, each Award which is assumed by the purchaser, successor or
surviving entity (or parent thereof) shall be appropriately adjusted, immediately after such Change of Control, to apply to the
number and class of securities which would have been issuable to the Participant upon the consummation of such Change of Control
had the Award been exercised, vested or earned immediately prior to such Change of Control, and other appropriate adjustments
in the terms and conditions of the Award shall be made. Upon the Participant’s Termination by the successor or surviving
entity without Cause, or by the Participant for Good Reason, in either case within twenty-four (24) months following the Change
of Control, all of the Participant’s Awards that are in effect as of the date of such Termination shall be vested in full
or deemed earned in full (assuming target performance goals provided under such Award were met, if applicable) effective on the
date of such Termination.

 

 

    	 	A-11	 

    	 

    

 

(ii)
To the extent the purchaser, successor or surviving entity (or parent thereof) in the Change of Control transaction does not assume
the Awards or issue replacement awards as provided in clause (i), then immediately prior to the date of the Change of Control:

 

(A)
each Option or SAR that is then held by a Participant who is employed by or in the service of the Company or an Affiliate shall
become immediately and fully vested, and, unless otherwise determined by the Board or Committee, all Options and SARs shall be
cancelled on the date of the Change of Control in exchange for a cash payment equal to the excess of the Change of Control Price
of the Shares covered by the Option or SAR that is so cancelled over the purchase or grant price of such Shares under the Award
(or for no payment, if there is no such excess);

 

(B)
Restricted Stock, Restricted Stock Units (and any related Dividend Equivalent Units) and Shares that are not then vested shall
vest;

 

(C)
all Performance Units (and any related Dividend Equivalent Units) that are earned but not yet paid shall be paid in an amount
equal to the value of the Performance Unit, and all Performance Units for which the performance period has not expired shall be
cancelled in exchange for a payment equal to the product of: (1) the value of the Performance Units that would have been earned
if the Performance Goals (as measured at the time of the Change of Control) were to continue to be achieved at the same rate through
the end of the performance period, or if higher, assuming the target Performance Goals had been met at the time of such Change
of Control; and (2) a fraction, the numerator of which is the number of whole months that have elapsed from the beginning of the
performance period to which the Award is subject to the date of the Change of Control and the denominator of which is the number
of whole months in the performance period;

 

(D)
all Cash Incentive Awards that are earned but not yet paid shall be paid, and all Cash Incentive Awards that are not yet earned
shall be cancelled in exchange for a cash payment in an amount determined by taking the product of: (1) the amount that would
have been due under such Award(s) if the Performance Goals (as measured at the time of the Change of Control) were to continue
to be achieved at the same rate through the end of the performance period, or if higher, assuming the target Performance Goals
had been met at the time of such Change of Control; and (2) a fraction, the numerator of which is the number of whole months that
have elapsed from the beginning of the performance period to which the Award is subject to the date of the Change of Control and
the denominator of which is the number of whole months in the performance period; and

 

(E)
all other Awards not described above that are not vested shall vest and if an amount is payable under such vested Award, such
amount shall be paid in cash based on the value of the Award.

 

(d)
If the value of an Award is based on the Fair Market Value of a Share, Fair Market Value shall be deemed to mean the per share
Change of Control Price. The Change of Control Price shall equal the price paid or deemed paid per Share in the Change of Control
transaction as determined by the Administrator. Notwithstanding anything to the contrary in this Section 16(d), the terms of any
Awards that are subject to Code Section 409A shall govern the treatment of such Awards upon a Change of Control, and the terms
of this Section 16(d) shall not apply, to the extent required for such Awards to remain compliant with Code Section 409A, as applicable.

 

    	 	A-12	 

    	 

    

 

(e)
Application of Limits on Payments. Except to the extent the Participant has in effect
an employment or similar agreement with the Company or any Affiliate or is subject to a policy that provides for a more favorable
result to the Participant upon a Change of Control, in the event that the Company’s legal counsel or accountants determine
that any payment, benefit or transfer by the Company under this Plan or any other plan, agreement, or arrangement to or for the
benefit of the Participant (in the aggregate, the “Total Payments”) to be subject to the tax (“Excise Tax”)
imposed by Code Section 4999 but for this Section 16(e), then, notwithstanding any other provision of this Plan to the contrary,
the Total Payments shall be delivered either (i) in full or (ii) in an amount such that the value of the aggregate Total Payments
that the Participant is entitled to receive shall be One Dollar ($1.00) less than the maximum amount that the Participant may
receive without being subject to the Excise Tax, whichever of (i) or (ii) results in the receipt by the Participant of the greatest
benefit on an after-tax basis (taking into account applicable federal, state and local income taxes and the Excise Tax). In the
event that (ii) results in a greater after-tax benefit to the Participants, payments or benefits included in the Total Payments
shall be reduced or eliminated by applying the following principles, in order: (A) the payment or benefit with the higher ratio
of the parachute payment value to present economic value (determined using reasonable actuarial assumptions) shall be reduced
or eliminated before a payment or benefit with a lower ratio; (B) the payment or benefit with the later possible payment date
shall be reduced or eliminated before a payment or benefit with an earlier payment date; and (C) cash payments shall be reduced
prior to non-cash benefits; provided that if the foregoing order of reduction or elimination would violate Code Section 409A,
then the reduction shall be made pro rata among the payments or benefits included in the Total Payments (on the basis of the relative
present value of the parachute payments).

 

17.
Miscellaneous.

 

(a)
Other Terms and Conditions. The Administrator may provide in any Award agreement such other provisions (whether or not
applicable to the Award granted to any other Participant) as the Administrator determines appropriate to the extent not otherwise
prohibited by the terms of the Plan. No provision in an Award agreement shall limit the Administrator’s discretion hereunder
unless such provision specifically so provides for such limitation.

 

(b)
Employment and Service. The issuance of an Award shall not confer upon a Participant any right with respect to continued
employment or service with the Company or any Affiliate, or the right to continue as a Director.

 

(c)
No Fractional Shares. No fractional Shares or other securities may be issued or delivered pursuant to this Plan. Unless
otherwise determined by the Administrator or otherwise provided in any Award agreement, all fractional Shares that would otherwise
be issuable under the Plan shall be canceled for no consideration.

 

(d)
Unfunded Plan; Awards Not Includable for Benefits Purposes. This Plan is unfunded and does not create, and should not be
construed to create, a trust or separate fund with respect to this Plan’s benefits. This Plan does not establish any fiduciary
relationship between the Company and any Participant or other person. To the extent any person holds any rights by virtue of an
Award granted under this Plan, such rights are no greater than the rights of the Company’s general unsecured creditors.
Income recognized by a Participant pursuant to an Award shall not be included in the determination of benefits under any employee
pension benefit plan (as such term is defined in Section 3(2) of the Employee Retirement Income Security Act of 1974, as amended)
or group insurance or other benefit plans applicable to the Participant which are maintained by the Company or any Affiliate,
except as may be provided under the terms of such plans or determined by resolution of the Board.

 

(e)
Requirements of Law and Securities Exchange. The granting of Awards and the issuance of Shares in connection with an Award
are subject to all applicable laws, rules and regulations and to such approvals by any governmental agencies or national securities
exchanges as may be required. Notwithstanding any other provision of this Plan or any award agreement, the Company has no liability
to deliver any Shares under this Plan or make any payment unless such delivery or payment would comply with all applicable laws
and the applicable requirements of any securities exchange or similar entity, and unless and until the Participant has taken all
actions required by the Company in connection therewith. The Company may impose such restrictions on any Shares issued under the
Plan as the Company determines necessary or desirable to comply with all applicable laws, rules and regulations or the requirements
of any national securities exchanges.

 

    	 	A-13	 

    	 

    

 

(f)
Code Section 409A. Any Award granted under this Plan shall be provided or made in such manner and at such time as to either
make the Award exempt from, or comply with, the provisions of Code Section 409A, and the provisions of Code Section 409A are incorporated
into this Plan to the extent necessary for any Award that is subject to Code Section 409A to comply therewith.

 

(g)
Governing Law; Venue. This Plan, and all agreements under this Plan, will be construed in accordance with and governed
by the laws of the State of Maryland, without reference to any conflict of law principles. Any legal action or proceeding with
respect to this Plan, any Award or any award agreement, or for recognition and enforcement of any judgment in respect of this
Plan, any Award or any award agreement, may only be brought and determined in a court sitting in the County of Howard in the State
of Maryland.

 

(h)
Limitations on Actions. Any legal action or proceeding with respect to this Plan, any Award or any award agreement, must
be brought within one year (365 days) after the day the complaining party first knew or should have known of the events giving
rise to the complaint.

 

(i)
Construction. Whenever any words are used herein in the masculine, they shall be construed as though they were used in
the feminine in all cases where they would so apply; and wherever any words are used in the singular or plural, they shall be
construed as though they were used in the plural or singular, as the case may be, in all cases where they would so apply. Titles
of sections are for general information only, and this Plan is not to be construed with reference to such titles.

 

(j)
Severability. If any provision of this Plan or any award agreement or any Award (a) is or becomes or is deemed to be invalid,
illegal or unenforceable in any jurisdiction, or as to any person or Award, or (b) would cause this Plan, any award agreement
or any Award to violate or be disqualified under any law the Administrator deems applicable, then such provision should be construed
or deemed amended to conform to applicable laws, or if it cannot be so construed or deemed amended without, in the determination
of the Administrator, materially altering the intent of this Plan, award agreement or Award, then such provision should be stricken
as to such jurisdiction, person or Award, and the remainder of this Plan, such award agreement and such Award will remain in full
force and effect.

 

    	 	A-14Exhibit
10.11

 

Execution
Copy

 

LICENSE
AGREEMENT

 

BY
AND BETWEEN

 

PROCESSA
PHARMACEUTICALS, INC.

 

AND

 

YUHAN
CORPORATION

 

DATED
AS OF AUGUST 19, 2020

 

    	 

     

    

 

TABLE
OF CONTENTS 

 

	ARTICLE
    I	DEFINITIONS	1
	 	 	 
	ARTICLE
    II	GRANTS
    OF RIGHTS	13
	 	 	 
	ARTICLE
    III	DEVELOPMENT
    & GOVERNANCE	14
	 	 	 
	ARTICLE
    IV	SUPPLY	17
	 	 	 
	ARTICLE
    V	COMMERCIALIZATION	18
	 	 	 
	ARTICLE
    VI	DILIGENCE	18
	 	 	 
	ARTICLE
    VII	FINANCIAL
    PROVISIONS	19
	 	 	 
	ARTICLE
    VIII	INTELLECTUAL
    PROPERTY OWNERSHIP, PROTECTION AND RELATED MATTERS	26
	 	 	 
	ARTICLE
    IX	CONFIDENTIAL
    INFORMATION	33
	 	 	 
	ARTICLE
    X	REPRESENTATIONS,
    WARRANTIES AND COVENANTS	35
	 	 	 
	ARTICLE
    XI	INDEMNIFICATION	38
	 	 	 
	ARTICLE
    XII	TERM
    AND TERMINATION	41
	 	 	 
	ARTICLE
    XIII	MISCELLANEOUS	45

 

Schedules

 

	Schedule
    1.10	Compound
	Schedule
    1.49	Form
    of Share Issuance Agreement
	Schedule
    1.57	Yuhan
    Patent Rights

 

    	- i -

    	 

    

 

LICENSE
AGREEMENT

 

THIS
LICENSE AGREEMENT is entered into this 19th day of August 2020 (the “Effective Date”), by and between Processa
Pharmaceuticals, Inc. a company organized under the laws of Delaware, having a business address at 7380 Coca Cola Drive, Suite
106, Hanover, MD 21076 (“Processa”), and Yuhan Corporation a company in Seoul, Korea, whose principal place
of business is at 74, Noryangjin-ro, Dongjak-gu, Seoul, Korea (“Yuhan”).

 

WHEREAS,
Yuhan has developed or obtained rights to Yuhan Know-How, Yuhan Patent Rights and the Compound (each as defined below); and

 

WHEREAS,
Processa desires to obtain a license of the Yuhan Patent Rights and the Yuhan Know-How to Develop and Commercialize Compounds
and Products (each as defined below), under the terms and conditions set forth herein, and Yuhan desires to grant such a license;

 

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

 

ARTICLE
I

DEFINITIONS

 

The
following terms, whether used in the singular or plural, shall have the following meanings:

 

1.1       “Affiliate.”
Affiliate means any Person directly or indirectly controlled by, controlling or under common control with, a Party, but only for
so long as such control shall continue. For purposes of this definition, “control” (including, with correlative meanings,
“controlled by,” “controlling,” and “under common control with”) means, with respect to a
Person, possession, direct or indirect, of (a) the power to direct or cause direction of the management and policies of such Person
(whether through ownership of securities or partnership or other ownership interests, by contract or otherwise), or (b) at least
50% of the voting securities (whether directly or pursuant to any vested and exercisable option, warrant or other similar arrangement)
or other comparable equity interests. For clarity, neither of the Parties shall be deemed to be an “Affiliate” of
the other.

 

1.2       “Bankruptcy
Code.” Bankruptcy Code means Title 11 of the U.S. Code, as amended from time to time.

 

1.3       “Business
Day.” Business Day means a day that is not a Saturday, Sunday, or a day on which banking institutions in Baltimore,
Maryland or in South Korea are authorized by Law to remain closed.

 

1.4       “Calendar
Quarter.” Calendar Quarter means each of the periods ending on March 31, June 30, September 30, and December 31 of any
Calendar Year.

 

1.5       “Calendar
Year.” Calendar Year means each calendar year during the Term.

 

    	 	1	 

     

    

 

1.6       “Combination
Product.” Combination Product means (a) any pharmaceutical product that is a single formulation consisting of a Compound
and one or more other active compounds or active ingredients, which other active compounds or active ingredients are not Compounds
(“Other API”) or (b) any combination of a Compound sold together with any separately formulated Other API for
a single invoiced price.

 

1.7       “Commercialization”
or “Commercialize.” Commercialization or Commercialize means activities directed to obtaining pricing and reimbursement
approvals, marketing, promoting, Manufacturing commercial supplies of, distributing, importing, offering for sale, or selling
a product.

 

1.8       “Commercially
Reasonable Efforts.” Commercially Reasonable Efforts means, with respect to an objective, the reasonable, diligent,
good faith efforts of a Party (including the efforts of its Affiliates and Sublicensees) to accomplish such objective that a biopharmaceutical
company of comparable size and resources would normally use to accomplish a similar objective under similar circumstances, and,
specifically with respect to obligations hereunder relating to a Compound or Product, the carrying out of such obligations with
those efforts and resources that a biopharmaceutical company of comparable size and resources would use were it Developing, Manufacturing
or Commercializing its own pharmaceutical products that are at a similar stage of development or product life cycle and of similar
market potential as the Compound or Product, taking into account actual and potential issues of safety, efficacy or stability,
product profile (including product modality, category and mechanism of action), stage of development or life cycle status, product
labeling or anticipated labeling, the present and future market potential, past performance of the Compound or Product, actual
and projected Development, Regulatory Approval, pricing and reimbursement approval, Manufacturing and Commercialization costs,
existing or projected pricing, sales, reimbursement and financial return, medical and clinical considerations, present and future
regulatory environment, any issues regarding the ability to Manufacture the Compound or Product, the likelihood and timing of
obtaining Regulatory Approvals and pricing and reimbursement approvals, proprietary position, strength and duration of patent
protection and anticipated exclusivity, competitive Third Party products at the time and the likely competitive environment at
the time of projected entry into the market and thereafter, and any other relevant scientific, technical, operational and commercial
factors, all as measured by the facts and circumstances at the time such efforts are due. Commercially Reasonable Efforts will
be determined on a country-by-country and indication-by-indication basis for the Compound or Product, and the level of effort
is expected to change over time, reflecting changes in the status and value of the Compound or Product and the market conditions
and country(ies) involved.

 

1.9       “Clinical
Trial.” Clinical Trial shall mean any study in which human subjects are dosed with a drug, whether approved or investigational,
including any Phase 1 Clinical Trial, Phase 2 Clinical Trial, Phase 3 Clinical Trial, or any Pivotal Clinical Trial.

 

1.10       “Compound.”
Compound means YH12852, which has the chemical structure set forth on Schedule 1.10, together with all analogs, derivatives, metabolites,
stereoisomers, polymorphs, formulations, mixtures or compositions thereof, and any existing or future improved or modified versions
of the foregoing developed by or on behalf of Processa, its Affiliates or Sublicensees.

 

    	 	2	 

     

    

 

1.11       “Control”
or “Controlled.” Control or Controlled means, with respect to any tangible property or intellectual property
right or other intangible property, the possession (whether by ownership or license (other than by grant of a license to one Party
by the other Party pursuant to this Agreement or by grant of a license or sublicense to a Sublicensee by Processa pursuant to
a license or sublicense agreement)) by a Person of the ability to grant to another Person access to such tangible property or
access to or a license or sublicense to such intellectual property right or other intangible property, as provided herein without
violating the terms of any agreement with any other Person.

 

1.12       “Cover,”
“Covering” or “Covered.” Cover, Covering or Covered means, with respect to a compound, product,
technology, process or method that, in the absence of ownership of or a license granted under a Patent Right, the manufacture,
use, offer for sale, sale or importation of such compound or product or the practice of such technology, process or method would
infringe such Patent Right (or, in the case of a Patent Right that has not yet issued, would infringe such Patent Right if it
were to issue).

 

1.13       “CTA.”
CTA means (a) a clinical trial authorization application filed with a Regulatory Authority in any regulatory jurisdiction outside
the United States, the filing of which is necessary to commence or conduct clinical testing of a drug or biologic product in humans
in such jurisdiction; or (b) documentation issued by a Regulatory Authority that permits the conduct of clinical testing of a
product in humans in a regulatory jurisdiction.

 

1.14       “Development”
or “Develop.” Development or Develop means pre-clinical, non-clinical and clinical drug research, discovery
and development activities, including IND-enabling toxicology and other IND-enabling pre-clinical development efforts, stability
testing, process development, compound property optimization, formulation development, delivery system development, quality assurance
and quality control development, statistical analysis, clinical pharmacology, Manufacturing supplies of compounds and products
for pre-clinical, non-clinical and clinical use, clinical studies (including pre- and post-approval studies and investigator sponsored
clinical studies), regulatory affairs, and Regulatory Approval and clinical study regulatory activities (excluding regulatory
activities directed to obtaining pricing and reimbursement approvals).

 

1.15       “EMA.”
EMA means the European Medicines Agency and any successor agency.

 

1.16       “FDA.”
FDA means the U.S. Food and Drug Administration and any successor agency.

 

1.17       “Field.”
Field means for use in the treatment, prevention, palliation, and/or diagnosis of any and all human and/or animal diseases, disorder,
or conditions.

 

1.18       “First
Commercial Sale.” First Commercial Sale means, with respect to a Product in a country, the first sale of such Product
in such country by Processa, any of its Affiliates or any Sublicensee to the first unrelated Third Party (excluding any Sublicensee)
in such country for use or consumption of such Product in such country after receipt of the first Regulatory Approval for such
Product in such country. Sales for purposes of testing the Product and sample purposes shall not be deemed a First Commercial
Sale. For clarity, First Commercial Sale will be determined on a Product-by-Product and country-by-country basis, as applicable.

 

    	 	3	 

     

    

 

1.19       “FPFV.”
FPFV means the first patient’s first screening visit in a Clinical Trial at or prior to which such subject signs an informed
consent to participate in such Clinical Trial.

 

1.20       “Governmental
Authority.” Governmental Authority means any national, federal, state or local government, or political subdivision
thereof, or any multinational organization or authority or any authority, agency, or commission entitled to exercise any administrative,
executive, judicial, legislative, police, regulatory or taxing authority or power, any court or tribunal (or any department, bureau
or division thereof), or any governmental arbitrator or arbitral body.

 

1.21       “IND.”
IND means an investigational new drug application filed with the FDA with respect to a Compound or Product, or an equivalent application
filed with the Regulatory Authority of a country or regulatory jurisdiction in the Territory other than the United States, and
all amendments and supplements thereto.

 

1.22       “Joint
Intellectual Property.” Joint Intellectual Property means the Joint Inventions and Joint Patent Rights.

 

1.23       “Know-How.”
Know-How means all unpatented technical information, trade secrets, formulae, standards, knowledge, directions, instructions,
test protocols, procedures and results, studies, analyses, raw material sources, data, Manufacturing data, and any other confidential
or proprietary interest in information.

 

1.24       “Law”
or “Laws.” Law or Laws means all laws, statutes, rules, regulations, orders, judgments, or ordinances of any
Governmental Authority.

 

1.25       “Losses.”
Losses means any and all (a) claims, losses, liabilities, damages, fines, royalties, governmental penalties or punitive damages,
deficiencies, interest, awards, judgments, and settlement amounts (including special, indirect, incidental, and consequential
damages, lost profits, and Third Party punitive and multiple damages) payable to a Third Party, and (b) in connection with all
of the items referred to in clause (a) above, any and all costs and expenses (including reasonable counsel fees and all other
expenses reasonably incurred in investigating, preparing or defending any litigation or proceeding, commenced or threatened) payable
to a Third Party.

 

1.26       “Major
Markets.” Major Markets means, collectively, the United States, France, Germany, Italy, Spain, and the United Kingdom.

 

1.27       “Manufacture”
or “Manufacturing.” Manufacture or Manufacturing means activities directed to making, having made, producing,
manufacturing, processing, filling, finishing, packaging, labeling, quality assurance testing and release, shipping and storage
of a product.

 

    	 	4	 

     

    

 

1.28       “Marketing
Approval.” Marketing Approval means any and all approvals (including supplements, amendments, and post-marketing approvals),
licenses, registrations or authorizations of any Regulatory Authority that are necessary to market and/or sell a drug or biologic
product in a country or jurisdiction for one or more uses.

 

1.29       “NDA.”
NDA means a New Drug Application, as defined in the United States Federal Food, Drug, and Cosmetic Act (21 U.S.C. 301, et. seq.,
as it may be amended from time to time, including the rules, regulations, guidance, guidelines, and requirements promulgated or
issued thereunder), filed with the FDA with respect to a Compound or Product, or an equivalent application filed with the Regulatory
Authority of a country in the Territory other than the United States, and all amendments and supplements thereto.

 

1.30       “Net
Sales.” Net Sales means the gross amounts billed or invoiced by Processa, or any of its Affiliates, to any Third Party
that is not a Sublicensee with respect to sales of Products in the Territory, calculated in the same manner as reported in such
Person’s audited financial statements, less the following to the extent actually incurred or allocated in accordance with
Processa’s or its Affiliates’ customary accounting practices consistently and generally applied:

 

(a)       Volume,
cash or trade discounts, credits or allowances not to exceed thirty five percent (35%) of the billed or invoiced amount, including
discounts in the form of inventory management fees paid to wholesalers and distributors all to the extent such discounts are included
in the invoices and actually granted, but excluding commissions for commercialization;

 

(b)       Credits,
refunds or allowances granted upon returns, rejections or recalls and for retroactive price reductions or billing errors;

 

(c)       Freight,
postage, shipping, and insurance costs incurred in transporting the applicable Products to the extent that such items are applicable
to such sale and are separately itemized and invoiced and actually paid as evidenced by invoices, receipts or other appropriate
documents;

 

(d)       Amounts
paid (including rebates and chargeback payments or credits or other equivalents thereof) to formularies, government or government
agency programs, trade customers, managed health care organizations and pharmacy benefit managers (or equivalents thereof) to
obtain listing or purchase of the applicable Products not to exceed thirty-five (35%) of the billed or invoiced amount;

 

(e)       Bad
debts, uncollectible amounts, and collection costs relating to the sale of Products that are actually written off; and

 

(f)       To
the extent not reimbursed by a third party, taxes, tariffs, duties or other governmental charges (other than income taxes) levied
on, absorbed, or otherwise imposed on the sales, transportation, delivery, use, exportation, or importation of the applicable
Products.

 

Sales
of Products between Processa and its Affiliates or Sublicensees for resale shall be excluded from the computation of Net Sales.
Subject to Section 7.6, all sales by a Sublicensee shall also be excluded from the computation of Processa Net Sales. Disposal
or use of Products at or below cost for regulatory, Development or charitable purposes, such as clinical trials, compassionate
use, named patient use, or indigent patient programs, shall not be deemed a sale hereunder.

 

    	 	5	 

     

    

 

With
respect to any sale of any Product in a given country for any substantive consideration other than monetary consideration on arm’s
length terms (which has the effect of reducing the invoiced amount below what it would have been in the absence of such non-monetary
consideration), for purposes of calculating the Net Sales under this Agreement, such Product shall be deemed to be sold exclusively
for cash at the average Net Sales price charged to Third Parties for cash sales in such country during the applicable reporting
period (or if there were only de minimis cash sales in such country, at the fair market value as determined in good faith
based on pricing in comparable markets).

 

If
a Product is sold as part of a Combination Product, Net Sales will be the product of (x) Net Sales of the Combination Product
calculated as above (i.e., calculated as for a non-Combination Product) and (y) the fraction (A/(A+B)), where:

 

(i)       A
is the average selling price of the Product comprising a Compound as the sole therapeutically active ingredient during the most
recently completed Calendar Quarter during which such non-Combination Product was sold in such country; and

 

(ii)       B
is the average selling price in such country of products containing the Other API contained in the Combination Product as the
sole therapeutically active ingredient when sold separately during the most recently completed Calendar Quarter during which such
products were sold in such country.

 

If
both A and B cannot be determined by reference to non-Combination Product sales as described above, then Net Sales for purposes
of determining Royalty payments will be calculated as above, but the average selling price in the above equation shall be determined
by mutual agreement reached in good faith by the Parties prior to the end of the accounting period in question based on an equitable
method of determining same that takes into account, in the applicable country, variations in dosage units and the relative fair
market value of each therapeutically active ingredient in the Combination Product. If the Parties are unable to reach such an
agreement prior to the end of the applicable accounting period, then the Parties will refer such matter to a jointly selected
Third Party with expertise in the pricing of pharmaceutical products that is not an employee, consultant, legal advisor, officer,
director or stockholder of, and does not have any conflict of interest with respect to, either Party for resolution, which will
be final and binding on the Parties.

 

1.31       “Party.”
Party means either Yuhan or Processa; “Parties” means both Yuhan and Processa.

 

1.32       “Patent
Rights.” Patent Rights means all patent applications, patents, certificates of invention, applications for certificates
of invention and priority patent filings, including any continuations, continuations-in-part, renewals, requests for continued
examination and divisions of any such patents and patent applications, any patents or certificates of invention issuing from any
of the foregoing, any extensions, reissues, reexaminations, substitutions, confirmations, registrations, revalidations, revisions,
additions or supplementary patent certificates thereto, and all foreign counterparts thereof.

 

    	 	6	 

     

    

 

1.33       “Person.”
Person means any natural person or any corporation, company, partnership, joint venture, firm, Governmental Authority, or other
entity, including a Party.

 

1.34       “Phase
1 Clinical Trial.” Phase 1 Clinical Trial means a single randomized, placebo, or active controlled human clinical trial
which provides for the first introduction into humans of a product, conducted in normal volunteers or patients to get information
on product safety, tolerability, immunogenicity, pharmacological activity, or pharmacokinetics, as more fully defined in 21 C.F.R.
§ 312.21(a) (or analogous regulations of an applicable Regulatory Authority outside the U.S.).

 

1.35       “Phase
2 Clinical Trial.” Phase 2 Clinical Trial means, a single randomized, placebo, or active controlled human clinical trial
of any product, the principal purposes of which are the evaluation of the efficacy of such product for a particular indication
in the target patient population and a determination of the common side-effects and risks associated with the product in the dosage
range to be prescribed and to obtain sufficient information about the efficacy for such pharmaceutical product in the disease
or condition being studied to permit the design and dose of such product in a Phase 2 Clinical Trial, as described in 21 C.F.R.
§ 312.21(b) (or analogous regulations of an applicable Regulatory Authority outside the U.S.). Phase 2 Clinical Trial shall
include any Phase 2a or Phase 2b Clinical Trial.

 

1.36       “Phase
3 Clinical Trial.” Phase 3 Clinical Trial means a single randomized, placebo or active controlled human clinical trial
of any product on sufficient numbers of patients that is designed to demonstrate statistically that such product is safe and efficacious
for its intended use, to evaluate the risk-benefit relationship of the product, and to define warnings, precautions and adverse
reactions that are associated with such product in the dosage range to be prescribed, as described in 21 C.F.R. § 312.21(c)
(or analogous regulations of an applicable Regulatory Authority outside the U.S.), and that is intended to support Regulatory
Approval of such product.

 

1.37       “Pivotal
Clinical Trial.” Pivotal Clinical Trial shall mean (a) a Phase 3 Clinical Trial that is intended by Company or its Affiliates
or Sublicensees to be submitted (together with any other registration trials that are prospectively planned when such Phase 3
Clinical Trial is Initiated) for Regulatory Approval in the United States or the EU, or (b) any other Clinical Trial that is intended
by Company or its Affiliates or Sublicensees to establish that a Product is safe and efficacious for its intended use, and to
determine warnings, precautions, and adverse reactions that are associated with such pharmaceutical product in the dosage range
to be prescribed, which Clinical Trial is a registration trial intended by Company or its Affiliates or Sublicensees to be sufficient
for filing an application for a Regulatory Approval for such product in the United States or another country or some or all of
an extra-national territory, solely as evidenced by the acceptance for filing for a Regulatory Approval for such Product after
completion of such Clinical Trial.

 

1.38       “Planned
Public Offering.” Planned Public Offering means Processa’s planned capital raise for the up-list to Nasdaq or
the NYSE pursuant to the sale of shares pursuant to the Form S-1 Registration Statement (File No. 333-235511), as amended.

 

    	 	7	 

     

    

 

1.39       “Processa
Intellectual Property.” Processa Intellectual Property means, collectively, Processa Know-How and Processa Patent Rights.

 

1.40       “Processa
Know-How.” Processa Know-How means all Know-How Controlled as of the Effective Date or thereafter during the Term by
Processa or any of its Affiliates (other than any Know-How included in Joint Intellectual Property) that is used by Processa or
any of its Affiliates in the Development, Manufacture or Commercialization of any Compound or Product; provided, however,
that, if Processa is acquired by a Third Party, “Processa Know-How” shall exclude any Know-How that (a) is Controlled
by such Third Party or the Affiliates of such Third Party (other than Processa and the Persons that were Processa’s Affiliates
immediately prior to the closing of such acquisition transaction (such Affiliates, “Processa Pre-Existing Affiliates”))
(“Processa Excluded Affiliates”) and (b) was not Controlled by Processa or any of the Processa Pre-Existing
Affiliates immediately prior to the closing of such acquisition transaction; provided further that, if, after the closing
of such acquisition, any such Processa Excluded Affiliate has or acquires Control of any Know-How that is necessary or useful
to Develop, Manufacture or Commercialize any Compound or Product and that is used to Develop, Manufacture or Commercialize any
such Compound or Product, such additional Know-How that is Controlled by such Processa Excluded Affiliate shall be included in
Processa Know-How.

 

1.41       “Processa
Patent Rights.” Processa Patent Rights means all Patent Rights in the Territory Controlled as of the Effective Date
or thereafter during the Term by Processa or any of its Affiliates (other than Joint Patent Rights) that Cover any Compound or
Product and are used by Processa or any of its Affiliates in the Development, Manufacture or Commercialization of any Compound
or Product; provided, however, that, if Processa is acquired by a Third Party, “Processa Patent Rights”
shall exclude any Patent Rights that (a) are Controlled by such Third Party or the Affiliates of such Third Party (other than
Processa and Processa Pre-Existing Affiliates) and (b) were not Controlled by Processa or any of the Processa Pre-Existing Affiliates
immediately prior to the closing of such acquisition transaction; provided further that, if, after the closing of such
acquisition, any such Processa Excluded Affiliate has or acquires Control of any Patent Right that Covers the Development, Manufacture
or Commercialization of any Compound or Product and that is used to Develop, Manufacture or Commercialize any such Compound or
Product, such additional Patent Right that is Controlled by such Processa Excluded Affiliate shall be included in Processa Patent
Rights.

 

1.42       “Product.”
Product means any pharmaceutical preparation containing one or more Compounds either as its only active ingredient(s) or as part
of a Combination Product. For the avoidance of doubt, nothing in this Agreement grants to Processa or Yuhan any right or license
under any Patent Rights or Know-How Controlled by Yuhan or Processa, respectively, with respect to any Other API.

 

1.43       “Regulatory
Approval.” Regulatory Approval means an approval by the applicable Regulatory Authority of an NDA and any other approval,
license, registration, permit, notification or authorizations (or waiver) of the applicable Regulatory Authority, which is necessary
for the Manufacture, use, storage, import, transport, promotion, marketing, distribution, offer for sale, sale, or other Commercialization
of pharmaceutical products in a given country or regulatory jurisdiction, other than any pricing or reimbursement approval.

 

    	 	8	 

     

    

 

1.44       “Regulatory
Authority.” Regulatory Authority means any Governmental Authority with responsibility for granting licenses or approvals
necessary for the Development, Manufacture, use, storage, import, transport, promotion, marketing, distribution, offer for sale,
sale or other Commercialization of pharmaceutical products in a country or regulatory jurisdiction, including but limited to the
FDA or EMA.

 

1.45       “Regulatory
Documentation.” Regulatory Documentation means: (i) all applications for Regulatory Approval; (ii) all Regulatory Approvals,
including INDs, CTAs and Marketing Approvals; (iii) all supporting documents created for, referenced in, submitted to or received
from an applicable Regulatory Authority relating to any of the applications or Regulatory Approvals described in clauses (i) or
(ii), including drug master files (or any equivalent thereof outside the U.S.), annual reports, regulatory drug lists, advertising
and promotion documents filed or shared with Regulatory Authorities, adverse event files, safety reports, inspection reports,
documents with regard to clinical data, complaint files and Manufacturing records and any supplements thereto; and (iv) all correspondence
made to, made with or received from any Regulatory Authority (including written and electronic mail correspondence and minutes
from meetings, discussions, or conferences (whether in person or by audio conference or videoconference)).

 

1.46       “Regulatory
Exclusivity.” Regulatory Exclusivity means exclusive marketing rights or data protection or other exclusivity rights
conferred by any Regulatory Authority with respect to a Product in a country or regulatory jurisdiction within the Territory,
other than a Patent Right, including orphan drug exclusivity, pediatric exclusivity, and rights conferred in the United States
under the Hatch-Waxman Act.

 

1.47       “Right
of Cross-Reference.” Right of Cross-Reference means an authorization that permits an applicable Regulatory Authority
in a country to rely on the relevant information (by cross-reference, incorporation by reference or otherwise) contained in Regulatory
Documentation (and any data contained therein) filed with such Regulatory Authority with respect to such Party’s compound
or product, as necessary to conduct a Clinical Trial, to support Regulatory Approval of a product, to support a label expansion,
or to support a further indication in such country or as otherwise expressly permitted or required under this Agreement to enable
a Party to exercise its rights or perform its obligations hereunder, and, without the disclosure of underlying Confidential Information
to such Party.

 

1.48       “Senior
Executive.” Senior Executive means, with respect to Yuhan, the CEO of Yuhan, or his or her designee, and, with respect
to Processa, the CEO of Processa, or his or her designee. “Senior Executives” means the applicable officers of Yuhan
and Processa.

 

1.49       “Share
Issuance Agreement.” Share Issuance Agreement means the Share Issuance Agreement entered into by Yuhan and Processa
as of August 19, 2020, a copy of which is set forth as Schedule 1.49.

 

1.50       “Sublicensee.”
Sublicensee means a Third Party that has been granted a sublicense under the rights granted to Processa pursuant to Section 2.1
of this Agreement, beyond the mere right to purchase Compound or Product Manufactured by or on behalf of Processa or its Affiliates.

 

    	 	9	 

     

    

 

1.51       “Territory.”
Territory means all countries of the world except for Manufacturing and Commercialization rights in South Korea.

 

1.52       “Third
Party.” Third Party means any Person other than Yuhan or Processa or any of their respective Affiliates.

 

1.53       “U.S.”
U.S. means the United States of America, including its territories and possessions.

 

1.54       “Valid
Claim.” Valid Claim means any claim of (a) an issued and unexpired patent within the Yuhan Patent Rights, Processa Patent
Rights, or Joint Patent Rights that has not been revoked or held unenforceable or invalid by a final decision of a court or other
Governmental Authority of competent jurisdiction, or that has not been disclaimed, denied or admitted to be invalid or unenforceable
through reissue or disclaimer or otherwise; or (b) a patent application within the Yuhan Patent Rights, Processa Patent Rights,
or Joint Patent Rights; provided that such a claim within a patent application has not been canceled, withdrawn, or abandoned
or been pending for more than seven (7) years from the date of its first priority filing in the applicable country. For clarity,
a claim of a patent that, pursuant to clause (b), had ceased to be a Valid Claim before it issued but that subsequently issues
and is otherwise described by clause (a), shall again be considered to be a Valid Claim once it issues until it is no longer considered
a Valid Claim in accordance with clause (a).

 

1.55       “Yuhan
Intellectual Property.” Yuhan Intellectual Property means the Yuhan Know-How and the Yuhan Patent Rights.

 

1.56       “Yuhan
Know-How.” Yuhan Know-How means all Know-How that is Controlled by Yuhan or any of its Affiliates as of the Effective
Date or thereafter during the Term (other than any Know-How included in Joint Intellectual Property) that is necessary or useful
to Develop, Manufacture or Commercialize any Compound or Product; provided, however, that, if Yuhan is acquired
by a Third Party, “Yuhan Know-How” shall exclude any Know-How that (a) is Controlled by such Third Party or the Affiliates
of such Third Party (other than Yuhan and the Persons that were Yuhan’s Affiliates immediately prior to the closing of such
acquisition transaction (such Affiliates, “Yuhan Pre-Existing Affiliates”)) (“Yuhan Excluded Affiliates”)
and (b) was not Controlled by Yuhan or any of the Yuhan Pre-Existing Affiliates immediately prior to the closing of such acquisition
transaction; provided further that, if, after the closing of such acquisition, any such Yuhan Excluded Affiliate has or
acquires Control of any Know-How that is necessary or useful to Develop, Manufacture or Commercialize any Compound or Product
and that is used to Develop, Manufacture or Commercialize any such Compound or Product, such additional Know-How that is Controlled
by such Yuhan Excluded Affiliate shall be included in Yuhan Know-How.

 

1.57       “Yuhan
Patent Rights.” Yuhan Patent Rights means all Patent Rights in the Territory that are Controlled by Yuhan or any of
its Affiliates as of the Effective Date or thereafter during the Term (other than Joint Patent Rights) that Cover any Compound
or Product. The Yuhan Patent Rights existing as of the Effective Date are set forth on Schedule 1.57; provided,
however, that, if Yuhan is acquired by a Third Party, “Yuhan Patent Rights” shall exclude any Patent Rights
that (a) are Controlled by such Third Party or the Affiliates of such Third Party (other than Yuhan and Yuhan Pre-Existing Affiliates)
and (b) were not Controlled by Yuhan or any of the Yuhan Pre-Existing Affiliates immediately prior to the closing of such acquisition
transaction; provided further that, if, after the closing of such acquisition, any such Yuhan Excluded Affiliate has or
acquires Control of any Patent Right that Covers the Development, Manufacture or Commercialization of any Compound or Product
and that is used to Develop, Manufacture or Commercialize any such Compound or Product, such additional Patent Right that is Controlled
by such Yuhan Excluded Affiliate shall be included in Yuhan Patent Rights.

 

    	 	10	 

     

    

 

1.58       Additional
Definitions. Each of the following definitions is set forth in the Section of this Agreement indicated below:

 

	Definition:	Section:
	Abandoned
    Patents	Section
    8.2(a)
	Agents	Section
    9.1
	Commercialization
    Plan	Section
    5.2
	Confidential
    Information	Section
    9.2
	Confidentiality
    Agreement	Section
    9.2
	Courts	Section
    13.1
	Deadlocked
    Matter	Section
    3.5(e)
	Development
    Milestone Payments	Section
    7.2
	Development
    Plan	Section
    6.1(a)
	Effective
    Date	Preamble
	Indemnified
    Party	Section
    11.3(a)
	Indemnifying
    Party	Section
    11.3(a)
	Infringement
    Claim	Section
    8.3(a)
	Joint
    Inventions	Section
    8.1(b)
	Joint
    Patent Rights	Section
    8.2(b)
	Late
    Payment Notice	Section
    7.12
	Milestone
    Shares	Section
    7.2
	Other
    API	Section
    1.6
	Paragraph
    IV Claim	Section
    8.8(a)
	PCYU
    Board	Section
    3.5(a)
	Product
    Liability Claims	Section
    11.1(b)
	Processa	Preamble
	Processa
    Excluded Affiliates	Section
    1.40
	Processa
    Parties	Section
    11.2
	Processa
    Pre-Existing Affiliates	Section
    1.40
	Processa
    Sole Inventions	Section
    8.1(a)
	ROFN
    Notice	Section
    4.2
	ROFN
    Response	Section
    4.2
	Royalties	Section
    7.5(a)
	Royalty
    Floor	Section
    7.5(d)
	Royalty
    Rate	Section
    7.5(a)
	Royalty
    Term	Section
    7.5(b)
	Sales
    Milestone Payment	Section
    7.4
	Sublicense
    Considerations	Section
    7.6(a)
	Sublicense
    Materials	Section
    2.1(c)
	Sublicense
    Payments	Section
    7.6
	Sublicensee
    Intellectual Property	Section
    2.1(c)
	Taxes	Section
    7.9
	Term	Section
    12.1
	Third
    Party Claims	Section
    11.1
	Third
    Party Patent Licenses	Section
    7.5(c)
	Upfront
    Fee	Section
    7.1
	Worldwide
    Annual Accrued Net Sales	Section
    7.4
	Yuhan	Preamble
	Yuhan
    Excluded Affiliates	Section
    1.56
	Yuhan
    Parties	Section
    11.1
	Yuhan
    Pre-Existing Affiliates	Section
    1.56
	Yuhan
    Sole Inventions	Section
    8.1(a)

 

    	 	11	 

     

    

 

1.59       Captions;
Certain Conventions; Construction. All headings and captions herein are for convenience only and shall not be interpreted
as having any substantive meaning. The Schedules to this Agreement are incorporated herein by reference and shall be deemed a
part of this Agreement. Unless otherwise expressly provided herein or the context of this Agreement otherwise requires:

 

(a)       words
of any gender include each other gender;

 

(b)       words
such as “herein,” “hereof,” and “hereunder” refer to this Agreement as a whole and not merely
to the particular provision in which such words appear;

 

(c)       words
using the singular shall include the plural, and vice versa;

 

(d)       the
words “include,” “includes” and “including” shall be deemed to be followed by the phrase “but
not limited to”, “without limitation”, “inter alia” or words of similar import;

 

(e)       the
word “or” shall be deemed to include the word “and” (i.e., shall mean “and/or”)

 

(f)       references
to “Article,” “Section,” “subsection,” “paragraph,” “clause,” or other
subdivision, or to a Schedule, without reference to a document, are to the specified provision or Schedule of this Agreement;
and

 

(g)       references
to “$” or “dollars” shall be references to U.S. Dollars.

 

This
Agreement shall be construed as if the Parties drafted it jointly.

 

    	 	12	 

     

    

 

ARTICLE
II

GRANTS OF RIGHTS

 

2.1       Licenses.

 

(a)       License.
Subject to the terms of this Agreement, Yuhan shall, and hereby does, grant to Processa an exclusive (even as to Yuhan and its
Affiliates), royalty-bearing right and license, including the right to sublicense in accordance with Section 2.1(b), under the
Yuhan Intellectual Property and Yuhan’s interest in the Joint Intellectual Property, to Develop, Manufacture, use and Commercialize,
including filing for, obtaining and maintaining Regulatory Approval for, Products in the Field in the Territory.

 

(b)       License
Back. Subject to the terms of this Agreement and in order to facilitate Yuhan’s right to Develop (solely to obtain Marketing
Approval), Manufacture and Commercialize Products in South Korea, Processa shall, and hereby does, grant to Yuhan an exclusive
(even as to Processa and its Affiliates), royalty-bearing and sublicensable right and license (i) to access and use any data generated
by or on behalf of Processa in the Development of Products for the Territory, including all data included in any regulatory submission;
and (ii) under any Processa Intellectual Property, and Processa’s interest in the Joint Intellectual Property directed to
modifications or improvements to the Yuhan Intellectual Property, in each case ((i) and (ii)) for the sole purpose of obtaining
Marketing Approval for, and Manufacturing and Commercializing the Products in South Korea only. Yuhan shall pay Processa a royalty
equal to three percent (3%) of Net Sales (by Yuhan or its Affiliates, or its or their sublicensees) of such Products Covered by
Processa Patents in South Korea (starting from the First Commercial Sale of such Product made by Yuhan in South Korea, to be calculated
in accordance with Sections 7.5(a) through 7.5(d), but without any reference to Section 7.6, applied mutatis mutandis as
if such Net Sales were made by Yuhan, and as if the Royalty Term were until the expiration or invalidation of the last Valid Claim
in the Processa Patents Covering such Patent in South Korea). Upon the expiration or invalidation of the last Valid Claim in the
Processa Patents Covering such Patent in South Korea, the licenses granted to Yuhan under this Section 2.1(b) shall become non-exclusive,
fully-paid-up, perpetual, and irrevocable.

 

(c)       Sublicenses.
From the Effective Date, Processa shall have the right to grant sublicenses under the licenses to Yuhan Intellectual Property
and Yuhan’s interest in the Joint Intellectual Property granted to Processa under Section 2.1(a) to its Affiliates and to
Third Parties, such sublicense rights being subject to Yuhan’s prior written approval (which may not be unreasonably withheld
or delayed) with respect to Third Parties; provided, however, that (i) any such sublicense shall be subject to all
applicable terms and conditions of this Agreement; (ii) any Sublicensee to whom Processa discloses Confidential Information shall
enter into an appropriate written agreement obligating such Sublicensee to be bound by obligations of confidentiality and restrictions
on use of such Confidential Information that are no less restrictive than the obligations in ARTICLE IX; (iii) Processa shall
at all times be responsible for the performance of such Sublicensee; and (iv) Processa shall, prior to granting any sublicense
to a Sublicensee under this Agreement, provide Yuhan with a copy of such sublicense agreement. Each agreement with each Sublicensee
must include grants of rights sufficient to enable Processa to grant substantially the rights set forth in Sections 12.7(b) through
12.7(f) with respect to (1) all Know-How and Patent Rights (including all applicable pre-clinical and clinical data, including
pharmacology and biology data; Manufacturing documents and materials; and Manufacturing technologies) Controlled by such Sublicensee
during the Term and used by such Sublicensee in the Development, Manufacture or Commercialization of any Compound or Product (collectively,
“Sublicensee Intellectual Property”); (2) all filings with Regulatory Authorities in the Territory relating
to Compounds and Products and Regulatory Approvals relating to Compounds and Products held by such Sublicensee, including related
correspondence with Regulatory Authorities; (3) all Manufacturing agreements to which such Sublicensee is a party that are related
to Compounds or Products; (4) all of such Sublicensee’s inventory of Compounds and Products existing as of the applicable
date; and (5) all trademarks owned by such Sublicensee and used solely in connection with the Products, along with all associated
goodwill ((1) – (5), collectively, “Sublicense Materials”).

 

    	 	13	 

     

    

 

2.2       Rights
Retained by the Parties. Any rights of Yuhan or Processa, as the case may be, not expressly granted to the other Party under
the provisions of this Agreement shall be retained by such Party.

 

2.3       Section
365(n) of the Bankruptcy Code. All rights and licenses granted under or pursuant to any section of this Agreement, including
the licenses granted under Sections 2.1 or 12.7(e) to Patent Rights and Know-How (including any data included in the Know-How),
are and will otherwise be deemed to be for purposes of Section 365(n) of the Bankruptcy Code, licenses of rights to “intellectual
property” as defined in Section 101(35A) of the Bankruptcy Code. Each Party will retain and may fully exercise all of its
respective rights and elections under the Bankruptcy Code. The Parties agree that each Party, as licensee of such rights under
this Agreement, will retain and may fully exercise all of its rights and elections under the Bankruptcy Code or any other provisions
of applicable Law outside the United States that provide similar protection for “intellectual property.”

 

2.4       Transfer
of Yuhan Material and Know-How. Within ninety (90) days after the Effective Date, Yuhan shall transition Yuhan Know-How to
Processa and provide Processa with reasonable amounts of consultation regarding the transferred Yuhan Know-How. In addition, Yuhan
will transfer all material and copies of documentation in English to Processa related to the Product including but not limited
to (a) documents including communications, reports, white papers and supporting material, lab or study notes, Manufacturing documents,
and similar material, (b) know-how related to the Development of the Product, and (c) Regulatory Approvals or clearances or submissions.

 

ARTICLE
III

DEVELOPMENT & Governance

 

3.1       General.
From the Effective Date, and subject to the terms of this Agreement, including the requirements of ARTICLE VI, with input from
the PCYU Board (defined in Section 3.5), Processa (or its Affiliates or Sublicensees) shall control and be solely responsible
for the Development of and regulatory activities with respect to Compounds and Products in the Field in the Territory, including
all costs and expenses relating thereto (excluding the costs and expenses of Yuhan appointed members of the PCYU Board). If Processa
requests Yuhan’s cooperation outside of the PCYU Board as described above, the Parties shall mutually agree in advance on
a budget therefor, and Processa shall reimburse Yuhan for any expenses incurred by Yuhan under this Section 3.1 within thirty
(30) days after receiving an invoice therefor.

 

    	 	14	 

     

    

 

3.2       Exchange
of Information Regarding Development. At least once each Calendar Year,
beginning on the Effective Date and ending on the date on which Processa obtains the first Regulatory Approval for a Product in
the United States and the first Regulatory Approval for a Product in another Major Market, Processa
shall provide Yuhan with a reasonably detailed report describing Processa’s Development activities and the summary results
thereof with respect to all Compounds and Products.

 

3.3       Right
of Cross Reference. Processa hereby grants
to Yuhan an option for an irrevocable and perpetual, fully paid-up, transferable right of access and Right of Cross-Reference
to all Regulatory Documentation and Regulatory Approvals for the Compound and Products anywhere in the Territory for purposes
of Development, Manufacture and Commercialization in South Korea. Yuhan may exercise such option and shall obtain such rights
upon giving written notice to Processa and paying a one-time fee of two hundred fifty thousand dollars ($250,000). Upon Yuhan’s
exercise of the option, Processa shall grant such rights to Yuhan and shall cooperate fully to make the benefits of such Regulatory
Documentation and Regulatory Approvals available to Yuhan or its designee, including by providing a signed statement to such effect.

 

3.4       Recalls.
In the event that any Regulatory Authority issues or requests a recall or takes a similar action in connection with a Product
in the Territory, or in the event either Party determines that an event, incident or circumstance has occurred that may result
in the need for a recall or market withdrawal in the Territory, the Party notified of such recall or similar action, or the Party
that desires such recall or similar action, shall within 24 hours, advise the other Party thereof by telephone, facsimile or email.
Processa, in consultation with Yuhan, through the PCYU Board, shall decide whether to conduct a recall in any market in the Territory
(except in the case of a government mandated recall, when Processa may act without such advance notice but, shall notify Yuhan
as soon as possible) and the manner in which any such recall shall be conducted (and in the event of any disagreement regarding
a recall in the Territory, the approach that is more conservative shall control). Each Party will make available to the other
Party, upon request, all of such Party’s (and its Affiliates’) pertinent records that such other Party may reasonably
request to assist such other Party in effecting any recall.

 

3.5       Processa
Yuhan Advisory Board.

 

(a)       General;
Responsibilities. Within thirty (30) days after the Effective Date, the
Parties will establish a Processa Yuhan Advisory Board (the “PCYU Board”) to oversee and coordinate the Parties’
activities under this Agreement to the extent provided in this Agreement. The PCYU Board shall:

 

(i)       oversee
the Development Plan to ensure that the goals and direction of the plan are identified and achieved and to advise on courses of
action to achieve the goal and direction of the plan;

 

(ii)       on
at least an annual basis, review the then-current Development Plan, and review, comment on, on approve (or reject) any proposed
amendments to the then-current Development Plan;

 

    	 	15	 

     

    

 

(iii)       not
oversee nor provide approval for the everyday operations of and decisions by Processa that are required to demonstrate the safety
and efficacy of the Compound and Products in order to obtain Regulatory Approval within any country in the Territory;

 

(iv)       not
oversee nor provide approval for the regulatory science process used by Processa for the Compound and Products in order to obtain
Regulatory Approval within any country in the Territory; and

 

(v)       perform
such other functions, in each case as expressly assigned to the PCYU and set forth in this Agreement or as mutually agreed upon
by the Parties in writing.

 

(b)       Composition.
The PCYU Board initially shall be composed of at least four (4) members, two (2) of whom shall be representatives appointed by
Processa and two (2) of whom shall be representatives appointed by Yuhan. Each PCYU Board member shall have the requisite experience
and seniority to enable such representative to make decisions on behalf of the Party who appointed such member with respect to
the issues falling within the jurisdiction of the PCYU Board. Neither Party shall appoint any representative to the PCYU Board
that is not an employee or member of the Board of Directors of such Party or its Affiliates without the prior written consent
of the other Party. Processa shall appoint one (1) of its representatives as the chairperson of the PCYU Board. The size of the
PCYU Board may be changed from time to time by written agreement of the Parties; provided that the PCYU Board shall at all times
include an equal number of representatives of each Party. Each Party may replace its PCYU Board representatives at any time upon
written notice to the other Party. An employee of Processa and not an official member of the PCYU Board may also be appointed
by Processa as Secretary to take notes and provide minutes for the Board. This Secretary shall not have any voting privileges
within the PCYU Board.

 

(c)       Meetings.
Unless otherwise agreed by the Parties, the PCYU Board shall hold meetings (a) at least once per Calendar Quarter or more often
as its members may determine until the filing of an IND for the Compound and (b) twice per Calendar Year thereafter until the
first anniversary of the First Commercial Sale in the Territory for the Product. PCYU Board meetings may be held in person or
by any means of telecommunications as the members deem necessary or appropriate, including telephone, video conference or similar
means in which each participant can hear what is said, and be heard, by the other participants. If a meeting is held in person,
PCYU Board members may, in lieu of attending in person, attend by any means of telecommunications in which each participant can
hear what is said, and be heard, by the other participants. A quorum of the PCYU Board shall exist whenever there is present at
a meeting at least one (1) representative appointed by each Party. Employees or consultants of either Party who are not members
of the PCYU Board may attend meetings of the PCYU Board; provided that: (i) such attendees shall not vote in the decision-making
process of the PCYU Board; (ii) such attendees shall be bound in writing by obligations of confidentiality and non-use equivalent
to those set forth in ARTICLE IX; and (iii) a consultant of a Party may attend a meeting only with prior notice to and consent
of the other Party, which shall not be unreasonably withheld or delayed; provided further that any PCYU Board meetings
that includes representatives of either Party who are not PCYU Board members may, at the request of any PCYU Board member, include
a closed session consisting of only PCYU Board members. Except as provided in the prior sentence, individuals who are not members
of the PCYU Board may not attend a meeting of the PCYU Board without the prior consent of both Parties. Each Party shall be responsible
for its own expenses of participating in the PCYU Board.

 

    	 	16	 

     

    

 

(d)       Minutes.
As soon as reasonably practicable and in any event no fewer than fifteen (15) Business Days prior to each meeting, Processa shall
disclose to Yuhan any proposed agenda items together with all appropriate information with respect to such proposed agenda items.
The chairperson of the PCYU Board shall prepare and circulate to all members of the PCYU Board for review draft minutes of each
PCYU Board meeting within an appropriate time after such meeting, but in no event later than the next meeting of the PCYU Board.
The Parties shall approve in writing the minutes of each meeting promptly.

 

(e)       Decision-Making.
The PCYU Board shall make decisions and take action by consensus of the members present at a meeting at which a quorum exists,
with each Party having a single vote, regardless of the number of representatives of such Party in attendance at such meeting.
If the PCYU Board does not reach consensus on any matter within its authority (a “Deadlocked Matter”), the
Deadlocked Matter will be referred to the Senior Executive of Processa or his/her designee as the final decision-making authority
with respect to such Deadlocked Matter provided that Processa shall not have any such final decision-making authority with respect
to a Deadlocked Matter that would require Yuhan to incur any additional costs or expenses, or otherwise materially adversely impact
Yuhan’s rights and obligations under this Agreement. In addition, if the PCYU Board recommends changes to the development
that require a change in budget, staffing, or external payments, the Senior Executive of Processa shall be the final decision-making
authority to approve or not approve the PCYU Board recommendation(s).

 

(f)       Authority.
The PCYU Board shall have only such powers as are specifically delegated to it under this Agreement, and for clarity the PCYU
Board shall not have any authority or ability to: (1) modify, amend, or waive the terms or conditions of this Agreement, including
the milestone payment provisions, license rights provisions and delegations of authority provisions; (2) determine whether or
not a breach of this Agreement has occurred; (3) make any decision that, under the terms of this Agreement, requires Yuhan’s
or Processa’s consent, approval or agreement or the consent, approval or agreement of both Parties; or (4) require Yuhan
or Processa to conduct any activities in contravention of, or outside the scope of, this Agreement.

 

(g)       Sublicensee;
Dissolution. If Processa grants sublicenses to Sublicensees for the Development, Manufacture, or Commercialization of the
Product in the Field in any Major Market, Processa will provide Yuhan with copies of all correspondence with such Sublicensee,
and shall invite Yuhan to attend all meetings
with such Sublicensee. Subject to the foregoing, if Processa grants sublicenses to Sublicensees for the Development, Manufacture
and Commercialization of the Product in the Field in all countries in the Territory, upon Yuhan’s written request the PCYU
Board shall dissolve. 

 

ARTICLE
IV

SUPPLY

 

4.1       Initial
Clinical Supply. Yuhan shall, upon Processa’s request, use its current inventory to supply Processa with its requirements
of the Compound and Product for all non-clinical studies, the first Phase 1 Clinical Trial, and first Phase 2 Clinical Trial to
be conducted by Processa subject to the terms and conditions set forth in a clinical supply agreement to be executed by the Parties.
The price for such initial clinical study supply shall be composed of Yuhan’s manufacturing cost. The Parties may agree
on additional activities to be performed by Yuhan for Processa in relation to the Compound and the Product under a clinical supply
agreement to be negotiated in good faith by the Parties.

 

    	 	17	 

     

    

 

4.2       ROFN
For Further Supply. Yuhan shall have an exclusive right of first negotiation for a supply agreement for any supply of the
Compound and Product to Processa for Development and Commercialization in the Territory other than as described in Section 4.1
as long as the Yuhan manufacturing site, control labs and storage facilities meet the GMP requirements of the Regulatory Authorities
for the clinical protocols or the Regulatory Authorities where the Product is commercially sold. Processa shall notify Yuhan in
writing of Processa’s intention to negotiate for such supply agreement (the “ROFN Notice”). If Yuhan
desires to negotiate for such supply agreement, Yuhan shall so notify Processa in writing (the “ROFN Response”)
within thirty (30) days of receipt of the ROFN Notice. Upon Processa’s receipt of the ROFN Response, Yuhan and Processa
shall negotiate in good faith for such supply agreement, for up to one hundred and twenty (120) calendar days from the date of
the ROFN Response (without guaranteeing success in reaching an agreement).

 

ARTICLE
V

COMMERCIALIZATION

 

5.1       General.
From the Effective Date, and subject to the terms of this Agreement, including the requirements of ARTICLE VI, Processa (or its
Affiliates or Sublicensees) shall control and be solely responsible for the Commercialization of Products in the Field in the
Territory, including all costs and expenses relating thereto.

 

5.2       Commercialization
Plans. During the Royalty Term with respect to each Product, at least thirty (30) days prior to the commencement of each Calendar
Year, Processa shall provide Yuhan, for Yuhan’s review and comments, a summary of the planned Commercialization activities
to be conducted by or on behalf of Processa and its Affiliates and Sublicensees with respect to such Product in each country in
the Territory during such Calendar Year (each such plan, a “Commercialization Plan”). Processa, its Affiliates
and Sublicensees shall consider Yuhan’s comments in good faith and shall not unreasonably decline to implement or incorporate
any comments of Yuhan regarding any aspect of the Commercialization Plan.

 

ARTICLE
VI

DILIGENCE

 

6.1       Commercially
Reasonable Efforts. During the Term, Processa shall, directly or through its Affiliates or Sublicensees, use Commercially
Reasonable Efforts, from and after the Effective Date, to Develop and obtain Regulatory Approval for one (1) Product in the Field
in the U.S. and in one (1) other Major Market, and, upon obtaining Regulatory Approval, Processa shall, directly or through its
Affiliates or Sublicensees, use Commercially Reasonable Efforts to Commercialize the Product. Without limiting or derogating from
the foregoing, Processa, by itself or through its Affiliates or Sublicensees, shall meet each of the following milestones within
the respective time periods set forth herein:

 

(a)       Prepare
a first draft of the Product Development plan (the “Development Plan”) which incorporates, in good faith, Yuhan’s
review and comment within ninety (90) days after the Effective Date;

 

    	 	18	 

     

    

 

(b)       Request
FDA pre-IND meeting for the Product within six (6) months from the Effective Date of this Agreement;

 

(c)       Dose
the first patient in a Phase 2A Clinical Trial with the Product within twenty-four (24) months from the Effective Date of this
Agreement;

 

(d)       Dose
the first patient with the Product in a Phase 2B Clinical Trial, Phase 3 Clinical Trial or other Pivotal Clinical Trial within
forty-eight (48) months from the Effective Date of this Agreement;

 

(e)       Achieve
First Commercial Sale of a Product within twelve (12) months from the date a Regulatory Approval for such Product is obtained.

 

6.2       Termination
for Failure to Meet Diligence Obligation. If, at any time during the Term, Processa fails to timely achieve any of the foregoing
milestones, or if Yuhan reasonably believes that Processa (itself and through its Affiliates and Sublicensees) has not complied
with its obligations under Section 6.1 to Develop one (1) Compound or Product in the Field in the U.S. for any consecutive nine
(9) month period following the Effective Date, Yuhan shall provide written notice to Processa specifying the nature of such reasonable
belief, and Yuhan may terminate this Agreement pursuant to Section 12.4.

 

ARTICLE
VII

FINANCIAL PROVISIONS

 

7.1       Upfront
Fee. In partial consideration for the rights granted to Processa hereunder, within ten (10) Business Days following the Effective
Date, Processa shall issue to Yuhan, for no additional consideration, the number of Processa common shares equivalent to USD $2,000,000
at a price of $8.00 per share, subject to adjustment in and otherwise in accordance with, the terms and conditions of the Share
Issuance Agreement (the “Upfront Fee”), which Upfront Fee shall be non-refundable and non-creditable. Notwithstanding
the foregoing, if Processa does not complete the Planned Public Offering before January 31, 2021, the number of shares of Processa
common stock issued in connection with the Upfront Fee will be adjusted in accordance with the Share Issuance Agreement.

 

7.2       Development
Milestone Payments. Processa shall make the following one-time, non-refundable, non-creditable development milestone payments
(the “Development Milestone Payments”) in the form of cash and issuance of Processa common shares (the “Milestone
Shares”) to Yuhan as set forth in Section 7.2(a) or 7.2(b) below. For avoidance of doubt, in no event shall both Section
7.2(a) and 7.2(b) apply.

 

(a)       The
milestones, payments and share issuances set forth in this Section 7.2(a) shall apply only in the event that (i) Yuhan and/or
its Affiliates purchase $3.0 million or more of the shares of common stock sold by Processa in the Planned Public Offering, or
(ii) if the Planned Public Offering does not occur by January 31, 2021, Yuhan and/or its Affiliates provide an amount equal to
or greater than $3.0 million of equity funding, on terms to be mutually agreed, to assist in the Development and Regulatory Approval
of the Product (for clarity, Processa shall not use such funding for any purpose other than in the Development and Regulatory
Approval of the Product):

 

	Development
    Milestone	 	Payment
	1st
    Patient Dosed in 1st Pivotal Trial	 	Milestone
    Shares Equivalent to $1,000,000*
	Last
    Patient Dosed 1st Pivotal Trial	 	Milestone
    Shares Equivalent to $1,500,000*
	1st
    NDA Approval	 	$4,000,000
	2nd
    NDA Approval	 	$3,000,000
	Ex-US
    1st Approval	 	$2,000,000
	Ex-US
    2nd Approval	 	$2,000,000

 

    	 	19	 

     

    

 

(b)       The
milestones, payments and share issuances set forth in this Section 7.2(b) shall apply only if both of the following occur: (i)
Yuhan and/or its Affiliates do not invest in the Processa Planned Public Offering or purchases less than $3.0 million of the shares
of common stock sold by Processa in the Planned Public Offering, and (ii) if the Planned Public Offering does not occur by January
31, 2021, Yuhan and/or its Affiliates do not otherwise provide equity funding, on terms to be mutually agreed to assist in the
Development and Regulatory Approval of the Product, or provide less than $3.0 million (in aggregate when combined with any amounts
invested pursuant to clause (i) above) of funding to assist in the Development and Regulatory Approval of the Product (for clarity,
Processa shall not use such funding for any purpose other than in the Development and Regulatory Approval of the Product):

 

	Development
    Milestone	 	Payment
	1st
    Patient Dosed in 1st Pivotal Trial	 	Milestone
    Shares Equivalent to $200,000
	Last
    Patient Dosed 1st Pivotal Trial 	 	Milestone
    Shares Equivalent to $200,000
	1st
    NDA Approval 	 	$2,000,000
	2nd
    NDA Approval 	 	$2,000,000
	Ex-US
    1st Approval 	 	$2,000,000
	Ex-US
    2nd Approval 	 	$2,000,000

 

*The
number of common shares of Processa issued in connection with the achievement of each milestone set forth in the Tables 7.2(a)
and 7.2(b) above shall be determined in accordance with the Share Issuance Agreement.

 

7.3       Development
and Commercialization Costs. For clarity, following the Effective Date, Processa shall be solely responsible for all costs
it incurs in Developing and Commercializing Compounds and Products, including all Manufacturing costs (excluding any compensation
or expenses incurred by the Yuhan appointed members of the PCYU Board).

 

    	 	20	 

     

    

 

7.4       Sales
Milestone Payments. Processa shall pay Yuhan the one-time, non-refundable, non-creditable sales milestone payments set forth
in the table below (the “Sales Milestone Payments”) within thirty (30) days after the end of the first Calendar
Year during which the total Net Sales accrued during such Calendar Year in the Territory (the “Worldwide Annual Accrued
Net Sales”) first reach the values indicated below. For clarity, each Sales Milestone Payment will apply once and only
once when the milestone is first achieved. Thereafter, the Sales Milestone Payment will no longer apply. In addition, if more
than one milestone is achieved in a Calendar Year, all associated Sales Milestone Payments will be paid. For illustration purposes,
if at a given Calendar Year Worldwide Annual Accrued Net Sales first reach $100,000,000 (without having reached $50,000,000 prior
to such Calendar Year); the Sales Milestone Payment for such Calendar Year will be $7,500,000 ($2,500,000 plus $5,000,000). If
in the next Calendar Year Worldwide Annual Accrued Net Sales first reach $250,000,000; the Sales Milestone Payment for such Calendar
Year will be $12,500,000 because the Milestone Payment for $50,000,000 and $100,000,000 has already been achieved and each Sales
Milestone Payment will apply once and only once. The calculation of Worldwide Annual Accrued Net Sales and the corresponding Sales
Milestone Payments shall exclude all sales made by a Sublicensee in the event that Processa receives Sublicense Consideration
on account of a specific Product in a specific Territory from such Sublicensee for which Processa is required to pay Yuhan the
applicable percentage of the Sublicense Consideration as set forth in Section 7.6.

 

	Worldwide
    Annual Accrued Net Sales	 	Payment
	≥
    $50M	 	$2,500,000
	≥
    $100M	 	$5,000,000
	≥
    $250M	 	$12,500,000
	≥
    $500M	 	$25,000,000
	≥
    $1 Billion	 	$50,000,000
	≥
    $2 Billion	 	$100,000,000
	≥
    $5 Billion	 	$200,000,000

 

7.5       Product
Royalties.

 

(a)       Royalty
Rate. Processa shall pay Yuhan royalties equal to seven percent (7%) (the “Royalty Rate”) on the aggregate
Net Sales of Products in the Territory (collectively, “Royalties”) during each Calendar Year to Yuhan on a
Product-by-Product basis. Notwithstanding the foregoing, with respect to Net Sales by Sublicensees, the Royalties shall exclude
all sales made by a Sublicensee in the event that Processa receives Sublicense Consideration on account of a specific Product
in a specific Territory from such Sublicensee for which Processa is required to pay Yuhan the applicable percentage of the Sublicense
Consideration as set forth in Section 7.6.

 

(b)       Royalty
Term and Adjustments. Processa’s Royalty obligations to Yuhan under this Section 7.5 shall commence on a country-by-country
and Product-by-Product basis on the Effective Date and shall expire on a country-by-country basis and Product-by-Product basis
on the later of (i) expiration or invalidation of the last Valid Claim Covering such Product in such country or (ii) the tenth
(10th) anniversary of the date of the First Commercial Sale by Processa or any of its Affiliates or Sublicensees (except as provided
above) to a non-Sublicensee Third Party of such Product in such country (the “Royalty Term”); provided
that, during any period within the Royalty Term remaining after the expiration of all Valid Claims Covering such Product in such
country and all Regulatory Exclusivity as to such Product in such country, the Royalties payable as to such Product in such country
under this Section 7.5 shall be reduced to fifty percent (50%) of the Royalties otherwise payable as to such Product in such country
pursuant to Section 7.5. Such Royalty reduction will be calculated by determining the portion of total Net Sales of the relevant
Product in a Calendar Quarter that is attributable to the applicable country in which such reduction applies, and by determining
the total Royalties without reduction, and then reducing to fifty percent (50%) the applicable portion (based on Net Sales) of
total Royalties attributable to the country in which such reduction applies. Upon the expiration of the Royalty Term with respect
to each Product in each country, the licenses granted to Processa under Section 2.1(a) shall become non-exclusive, fully-paid–up,
perpetual and irrevocable with respect to such Product in such country.

 

    	 	21	 

     

    

 

(c)       Third
Party Payments. If, in the opinion of patent counsel mutually acceptable to both Processa and Yuhan, in order to Develop,
Manufacture, use or Commercialize a Product in the Field in a country of the Territory without infringing any third party intellectual
property rights relating to the Yuhan Intellectual Property, Processa or its Affiliate or Sublicensee is obligated to obtain a
license or comparable grant of rights (e.g., a covenant not to sue) under any Patent Rights from a Third Party (“Third
Party Patent Licenses”) and pay a royalty under such Third Party Patent License with respect to such Product in such
country, then, subject to Section 7.5, forty percent (40%) of such royalties actually paid by Processa, its Affiliates or Sublicensees
shall be creditable against Royalties payable to Yuhan hereunder with respect to such Product in such country; provided
that, (i) if Processa is obligated to enter into any Third Party Patent License, Processa shall use Commercially Reasonable Efforts
to minimize the royalties owed by Processa under such Third Party Patent License; and (ii) for any creditable amounts permitted
under the Section 7.5(c) but that are not applied in a given Calendar Quarter as a result of the Royalty Floor set forth in Section
7.5(d), Processa may carry forward and apply such amounts against Royalties due in up to four (4) subsequent Calendar Quarters,
or until the amount of such reduction has been fully applied against Royalties due to Yuhan, whichever is earlier (in each case
subject to Section 7.5(d)).

 

(d)       Royalty
Floor. In no event shall the Royalty reductions described in Sections 7.5(b) and 7.5(c), alone or together, reduce the Royalties
payable by Processa for a given Calendar Quarter during the Royalty Term for a Product in a particular country in the Territory
to less than fifty percent (50%) of the amounts otherwise payable by Processa for such Calendar Quarter pursuant to Section 7.5(a)
(the “Royalty Floor”).

 

7.6       Sublicense.
If Processa sublicenses the Product, Yuhan shall receive the applicable percentage of any Sublicense Consideration, as described
in this Section 7.6 (the “Sublicense Payments”). The percentages described in this Section 7.6 shall apply
to all Sublicense Consideration. Notwithstanding the foregoing, in the event that Processa receives Sublicense Consideration on
account of a specific Product in a specific Territory, then in such case Processa shall be required to pay Yuhan the applicable
Sublicense Payment, but such Sublicense Consideration shall not be taken into account when calculating Development Milestone Payments
(Section 7.2) or Sales Milestone Payments (Section 7.4) or Royalties (Section 7.5). To clarify, three example scenarios are presented:

 

Example
1: If Processa Develops the Product in multiple Territories and licenses out the commercial sales to Sublicensee in all Territories
such that Processa does not sell any of the product. The financial terms of ARTICLE VII would then be the following: Sections
7.2-7.3 would apply, Sections 7.4-7.5 would no longer apply, and Section 7.6 would apply for any funds from Sublicense Consideration
for the Sublicensee Territories using the table in this Section 7.6. The percentage in the table would apply to all financial
considerations from the Sublicensee such as upfront fees, any milestones payments, and royalties.

 

    	 	22	 

     

    

 

Example
2: If Processa Develops and Commercializes the Product in US while Sublicensing the Product for Development and Commercialization
in other territories. The financial terms of ARTICLE VII would then be the following: Sections 7.2 – 7.3 would apply, Sections
7.4-7.5 would only apply to Territories in which Processa Commercializes the Product, and Section 7.6 would apply for any funds
from Sublicense Consideration for the Sublicensee Territories using the table in this Section 7.6. The percentage in the table
would apply to all financial considerations from the Sublicensee such as upfront fees, any milestones payments, and royalties.

 

Example
3: If Processa sublicenses the Product prior to Phase 3 trial and Sublicensee completes Development, obtains Regulatory Approval,
and Commercializes the Product. The financial terms of ARTICLE VII would then be the following: for Sections 7.2 – 7.3 Processa
would pay for milestones that it has completed, the remaining milestones of Sections 7.2 – 7.3 not completed by Processa
would no longer apply, Sections 7.4-7.5 would not apply, and Section 7.6 would apply for any funds from Sublicense Consideration
for the Sublicensee Territories using the table in this Section 7.6. The percentage in the table would apply to all financial
considerations from the Sublicensee such as upfront fees, any milestones payments, and royalties.

 

(a)       Sublicense
Considerations shall mean any payments or other consideration that Processa or its Affiliates receive as a direct result of
the grant of a sublicense or an option to obtain such sublicense, including without limitation license fees, license option fees,
milestone payments, license maintenance fees, equity, and royalty on Sublicensee sales, provided that in the event that Processa
or its Affiliates receive non-monetary consideration in connection with a sublicense, Sublicense Considerations shall be calculated
based on the fair market value of such consideration or transaction, assuming an arm’s length transaction made in the ordinary
course of business. Notwithstanding the foregoing, Sublicense Considerations shall not include amounts expressly dedicated to,
and actually expended by the Sublicensee to reimburse Processa and its Affiliates for, the Development of Products, up to the
sum of the actual external costs incurred by Processa and its Affiliates for such activities.

 

(b)       Processa
shall pay Yuhan the Sublicense Payments within thirty (30) days after the receipt of the Sublicense Consideration. Depending on
when the applicable sublicense agreement enters into force Processa shall pay to Yuhan the percentage defined in the following
Table:

 

	Sublicense
    Effective Date	 	Sublicense
    Payment Percentage
	Before
    1st Phase 2a Clinical Trial FPFV 	 	80%
    
	Before
    1st Phase 2b Clinical Trial FPFV	 	50%
	After
    1st Phase 2b Clinical Trial FPFV but Before 1st Phase 3 Clinical Trial FPFV	 	40%
    
	After
    1st Phase 3 Clinical Trial FPFV 	 	30%
    

 

    	 	23	 

     

    

 

7.7       Reports;
Payments. Within thirty (30) days after the end of each Calendar Quarter commencing from the earlier of (a) the First Commercial
Sale of a Product; or (b) the grant of a sublicense or receipt of Sublicense Consideration, Processa shall furnish Yuhan with
a quarterly report (“Periodic Report”) detailing, at a minimum, the following information for the applicable
Calendar Quarter, each listed by Product and by country of sale: (i) the total number of units of Product sold by Company, its
Affiliates and Sublicensees for which Royalties are owned to Yuhan hereunder, including a breakdown of the number and type of
Products sold, (ii) gross amounts received for all such sales, (iii) deductions by type taken from Net Sales as specified herein,
(iv) Net Sales, (v) Royalties, Development Milestone Payments and Sales Milestone Payments owed to Yuhan, listed by category,
(vi) Sublicense Consideration received during the preceding Calendar Quarter and sublicense fees due to Yuhan, (vii) the currency
in which the sales were made, including the computations for any applicable currency conversions, (viii) invoice dates and all
other data enabling the Royalties and sublicense fees payable to be calculated accurately and (ix) a detailed summary of progress
against each development and regulatory milestone set forth in Section 7.2 and each sales milestone set forth in Section 7.4,
and an estimate of the timing of the achievement of the next applicable milestone. Once the events set forth in sub-section (a)
or (b), above, have occurred, Periodic Reports shall be provided to Yuhan whether or not Royalties, Development Milestone Payments,
Sales Milestone Payments or sublicense fees are payable for a particular Calendar Quarter. In addition to the foregoing, upon
Yuhan’s reasonable request, Processa will provide to Yuhan such other information as may be reasonably requested by Yuhan,
and will otherwise cooperate with Yuhan as reasonably necessary, to enable Yuhan to verify Processa’s compliance with the
payment and related obligations under this Agreement, including verification of the calculation of amounts due to Yuhan under
this Agreement and of all financial information provided or required to be provided in the Periodic Reports. Concurrently with
each such report, Processa shall pay to Yuhan all amounts payable by it under Sections 7.4, 7.5, and 7.6.

 

7.8       Books
and Records; Audit Rights. Processa shall keep complete and accurate records of the underlying revenue and expense data relating
to the calculations of Net Sales and payments required by Sections 7.4, 7.5, and 7.6. Yuhan shall have the right, once annually
at its own expense, to have an independent, certified public accounting firm, selected by Yuhan and reasonably acceptable to Processa,
review any such records of Processa in the location(s) where such records are maintained by Processa upon reasonable notice (which
shall be no less than fourteen (14) days prior notice) and during regular business hours and under obligations of strict confidence,
for the sole purpose of verifying the basis and accuracy of payments made under Sections 7.4, 7.5, and 7.6 within the thirty-six
(36) month period preceding the date of the request for review. The report of such accounting firm shall be limited to a certificate
stating whether any report made or payment submitted by Processa during such period is accurate or inaccurate and the actual amounts
of Net Sales, and Royalties due, for such period. Processa shall receive a copy of each such report concurrently with receipt
by Yuhan. Should such inspection lead to the discovery of a discrepancy to Yuhan’s detriment, Processa shall pay within
five (5) Business Days after its receipt from the accounting firm of the certificate the amount of the discrepancy plus interest
calculated in accordance with Section 7.12. Yuhan shall pay the full cost of the review unless the underpayment is greater than
five percent (5%) of the amount due for any applicable Calendar Year, in which case Processa shall pay the reasonable cost charged
by such accounting firm for such review. Any overpayment by Processa revealed by an examination shall be fully creditable against
future payments.

 

    	 	24	 

     

    

 

7.9       Tax
Matters. Except as expressly provided below, no payments to be made to Yuhan by Processa hereunder shall be reduced by or
on account of any taxes, levies, imposts, duties, charges, assessments or fees (collectively, “Taxes”). Notwithstanding
the immediately preceding sentence, if any applicable Law requires (with due regard to any relief to which Yuhan may be entitled)
that Taxes be deducted and withheld from any payment made to Yuhan by Processa under this Agreement, Processa shall (a) deduct
those Taxes, together with any interest and penalties properly assessed thereon, from such payment or from any other payment owed
by Processa hereunder; (b) transmit the amounts so deducted to the proper Governmental Authority; (c) send evidence of the requirement
together with proof of due transmission of the amounts described in clause (b) to Yuhan promptly following such payment; and (d)
remit to Yuhan the net amount of such payment after taking account of such deduction. In determining whether to deduct any amount
hereunder and prior to making such deduction, Processa shall contact Yuhan and take due account of all documentation supplied
by Yuhan, and of other facts known to Processa, supporting a reduction in any Tax otherwise required to be deducted, or a credit
therefor or refund thereof. Processa will reasonably cooperate with Yuhan in respect of Tax matters relating to payments made
by Processa to Yuhan under this Agreement and any disputes with a Governmental Authority regarding such matters, including without
limitation: (y) complying with reasonable requests from Yuhan to change the form, place or other circumstances of payments to
be made to Yuhan by Processa under this Agreement so as to reduce the incidence of Taxes on such payments or recover any Taxes
imposed on such payments (any such recovery to be for the benefit of Yuhan); and (z) in connection with any official or unofficial
audit or contest relating to such payments.

 

7.10       Payment
Method and Currency Conversion. All payments shall be made in U.S. dollars in immediately available funds via either a bank
wire transfer, an ACH (automated clearing house) mechanism, or any other means of electronic funds transfer, at Processa’s
election, to Yuhan’s bank account, or to such other bank account as Yuhan shall designate in a notice at least ten (10)
days before the payment is due. For the purposes of determining the amount of any Royalties due for the relevant Calendar Quarter
under Section 7.5, the amount of Net Sales in any foreign currency shall be converted into U.S. dollars in accordance with the
average of the closing exchange rates reported in The Wall Street Journal (U.S., Eastern Edition) for the first, middle
and last Business Days of the applicable reporting period for the payment due.

 

7.11       Blocked
Payments. If by reason of applicable Laws in any country in the Territory, it becomes impossible or illegal for Processa or
its Affiliates or Sublicensees to transfer, or have transferred on its behalf Royalties or other payments to Yuhan or to Processa
or its Affiliates or Sublicensees, Processa shall promptly notify Yuhan of the conditions preventing such transfer. To the extent
any payments to Yuhan cannot be transferred pursuant to the preceding sentence, such amounts shall be deposited in local currency
in the relevant country to the credit of Yuhan in a recognized banking institution designated by Yuhan or, if none is designated
by Yuhan within a period of thirty (30) days, in a recognized banking institution selected by Processa or its Affiliate or Sublicensee,
as the case may be, and identified in a notice given to Yuhan. If so deposited in a foreign country, Processa shall provide, or
cause its Affiliate or Sublicensee to provide, reasonable cooperation to Yuhan so as to allow Yuhan to assume control over such
deposit as promptly as practicable.

 

    	 	25	 

     

    

 

7.12       Late
Payments. If a Party shall fail to make a timely payment pursuant to the terms of this Agreement, the other Party shall provide
written notice of such failure to the non-paying Party (a “Late Payment Notice”), and interest shall accrue
on the past due amount starting on the date of the Late Payment Notice at the U.S. dollar prime lending rate as reported in The
Wall Street Journal effective for the date that payment was due (as published in The Wall Street Journal) plus five percent (5%)
per annum, computed for the actual number of days after the date of the Late Payment Notice that the payment was past due.

 

ARTICLE
VIII

INTELLECTUAL PROPERTY OWNERSHIP, PROTECTION

AND RELATED MATTERS

 

8.1       Ownership
of Inventions.

 

(a)       Sole
Inventions. Yuhan shall exclusively own all inventions relating to any Compound or Product or its Manufacture or use made
solely by Yuhan, its employees, agents, and consultants (“Yuhan Sole Inventions”). Processa shall exclusively
own all inventions relating to any Compound or Product or its Manufacture or use made solely by Processa, its employees, agents,
and consultants in each case independently of and without using any Yuhan Intellectual Property or Joint Inventions (“Processa
Sole Inventions”).

 

(b)       Joint
Inventions. The Parties shall jointly own all inventions relating to any Compound or Product or its Manufacture or use (i)
made jointly by employees, agents and consultants of Processa, on the one hand, and employees, agents and consultants of Yuhan,
on the other hand, or (ii) made solely by Processa, its employees, agents, and consultants by using or referencing Yuhan Intellectual
Property or Joint Inventions, in each case ((i) and (ii)) on the basis of each Party having an undivided interest in the whole
(“Joint Inventions”). Joint Inventions may only be used in accordance with and subject to the terms and conditions
of this Agreement.

 

(c)       Inventorship.
For purposes of determining whether an invention is a Processa Sole Invention, a Yuhan Sole Invention or a Joint Invention, questions
of inventorship shall be resolved in accordance with United States patent Laws.

 

8.2       Prosecution
and Maintenance of Patent Rights.

 

(a)       Prosecution
of Yuhan Patent Rights. With respect to Yuhan Patent Rights, Yuhan and Processa shall cooperate in good faith in connection
with the continued prosecution and maintenance by Processa of such Yuhan Patent Rights in any countries in the Territory (including
South Korea). Processa shall control prosecution and maintenance of such Yuhan Patent Rights. The out-of-pocket costs and expenses
incurred by Processa after the Effective Date to obtain, prosecute and maintain Yuhan Patent Rights shall be borne one hundred
percent (100%) by Processa. Processa shall file international patent applications, or designate for national filing and file,
in all countries selected by Processa taking into account, in good faith, any comments from Yuhan. Yuhan shall promptly (as soon
as commercially practicable) deliver to Processa copies of all official correspondence, on an “as-is” basis, existing
as of the Effective Date with the applicable patent and trademark offices in the Territory relating to the Yuhan Patent Rights
and, after the Effective Date Processa shall promptly provide Yuhan drafts of all proposed filings and correspondence to any patent
authority with respect to the Yuhan Patent Rights for Yuhan’s review and comment prior to the submission of such proposed
filings and correspondences. Processa shall keep Yuhan informed of the status of all pending patent applications that pertain
to any Compound or Product. Processa, its agents and attorneys shall not unreasonably decline to implement or incorporate any
comments of Yuhan regarding any aspect of such patent prosecutions. Processa shall not abandon any Yuhan Patent Rights (the “Abandoned
Patents”) without at least ninety (90) days’ prior notice to Yuhan. If Processa decides to abandon any Yuhan Patent
Rights, Yuhan shall have the option to continue to prosecute and maintain the Abandoned Patents in Yuhan’s name and at Yuhan’s
sole expense.

 

    	 	26	 

     

    

 

(b)       Prosecution
of Joint Patent Rights. Processa shall be responsible for obtaining, prosecuting, and/or maintaining patents and patent applications,
in any countries in the Territory (including South Korea), Covering Joint Inventions (“Joint Patent Rights”).
Processa shall control prosecution and maintenance of such Joint Patent Rights. The out-of-pocket costs and expenses incurred
to obtain, prosecute and maintain Joint Patent Rights shall be borne one-hundred percent (100%) by Processa. Processa shall promptly
provide Yuhan drafts of all proposed filings and correspondence to any patent authority with respect to the Joint Patent Rights
for Yuhan’s review and comment (which comments shall be considered reasonably and in good faith) prior to the submission
of such proposed filings and correspondences. Processa shall keep Yuhan informed of the status of all pending Joint Patent Rights.
Processa, its agents and attorneys shall not unreasonably decline to implement or incorporate any comments of Yuhan regarding
any aspect of such patent prosecutions. Processa shall not abandon any Joint Patent Right without at least ninety (90) days’
prior notice to Yuhan. If Processa decides to abandon any Joint Patent Right, Yuhan shall have the option to continue to prosecute
and maintain such Joint Patent Right jointly in both Parties’ names, at Yuhan’s sole expense.

 

(c)       Prosecution
of Processa Patent Rights. Processa has the sole right, but not the responsibility, to obtain, prosecute, and/or maintain
the Processa Patent Rights. Processa shall keep Yuhan informed of the status of all pending Processa Patent Rights. Processa shall
promptly provide Yuhan drafts of all proposed filings and correspondence to any patent authority with respect to the Processa
Patent Rights for Yuhan’s review and comment (which comments shall be considered reasonably and in good faith) prior to
the submission of such proposed filings and correspondences. Processa, its agents and attorneys shall not unreasonably decline
to implement or incorporate any comments of Yuhan regarding any aspect of such patent prosecutions. Processa shall not abandon
any Processa Patent Right without at least ninety (90) days’ prior notice to Yuhan. If Processa decides to abandon any Processa
Patent Right, Yuhan shall have the option to continue to prosecute and maintain such Processa Patent Right jointly in both Parties’
names, at Yuhan’s sole expense.

 

(d)       Cooperation.
Each Party agrees to cooperate fully in the preparation, filing, prosecution, and maintenance of Yuhan Patent Rights, Joint Patent
Rights, and Processa Patent Rights, pursuant to this Section 8.2 and in the obtaining and maintenance of any patent term extensions,
supplementary protection certificates, pediatric extensions, and their equivalent with respect thereto. Such cooperation includes:
(i) executing all papers and instruments, or requiring its employees or contractors, to execute such papers and instruments, so
as enable the other Party to apply for and to prosecute patent applications in any country as permitted by this Section 8.2; and
(ii) promptly informing the other Party of any matters coming to such Party’s attention that may affect the preparation,
filing, prosecution, or maintenance of any such patent applications.

 

    	 	27	 

     

    

 

8.3       Third
Party Infringement.

 

(a)       Notice.
Each Party shall promptly report in writing to the other Party during the Term any known or suspected (i) infringement of any
of the Yuhan Patent Rights, Processa Patent Rights or Joint Patent Rights, or (ii) unauthorized use or misappropriation of any
of the Yuhan Know-How, Processa Sole Invention or Joint Inventions, in the case of either clause (i) or clause (ii), that could
reasonably be expected to impact the (A) Development, Manufacture, use or Commercialization of a Compound or Product, or (B) scope
of the rights licensed to such Party under ARTICLE II (an “Infringement Claim”), of which such Party becomes
aware, and shall provide the other Party with all available evidence supporting such Infringement Claim.

 

(b)       Initial
Right to Enforce.

 

(i)       Enforcement
by Processa. Subject to Section 8.3(c)(i), Processa (itself or through its Affiliate or Sublicensee) shall have the first
right, but not the obligation, to initiate a suit, or take other appropriate action that it believes is reasonably required to
protect (i.e., prevent or abate actual or threatened infringement or misappropriation of) or otherwise enforce the Yuhan
Intellectual Property and Joint Intellectual Property with respect to an Infringement Claim anywhere in the Territory and the
Processa Intellectual Property with respect to an Infringement Claim anywhere in the world; provided, however, that
Processa shall (x) consult with Yuhan in good faith with respect to any claim that any Yuhan Patent Right, Processa Patent Right
in South Korea or Joint Patent Right is invalid or unenforceable and (y) implement any reasonable comment from Yuhan regarding
any aspect of defending against any such claim described in clause (x). Any such suit by Processa shall be brought either in the
name of Yuhan or its Affiliate, the name of Processa or its Affiliate, or the names of Processa, Yuhan and their respective Affiliates,
as may be required by the Law of the forum. For this purpose, Yuhan shall execute such legal papers and cooperate in the prosecution
of such suit, including providing full access to documents, information and witnesses as reasonably requested by Processa in connection
with such suit, as may be reasonably requested by Processa; provided that Processa shall promptly reimburse all out-of-pocket
expenses (including reasonable counsel fees and expenses) actually incurred by Yuhan in connection with such cooperation. For
clarity, as between Yuhan and Processa, (A) Yuhan shall have the sole right, but not the obligation, to protect Yuhan Intellectual
Property against any suspected misappropriation or infringement that does not constitute an Infringement Claim and (B) the Parties
shall jointly determine by mutual agreement whether and how to protect Joint Intellectual Property against any suspected misappropriation
or infringement that does not constitute an Infringement Claim, and the provisions of this ARTICLE VIII shall not apply with respect
thereto.

 

    	 	28	 

     

    

 

(ii)       Enforcement
by Yuhan. Subject to Section 8.3(c)(ii), Yuhan (itself or through its Affiliate) shall have the first right, but not the obligation,
to initiate a suit, or take other appropriate action that it believes is reasonably required to protect (i.e., prevent
or abate actual or threatened infringement or misappropriation of) or otherwise enforce the Yuhan Intellectual Property and Joint
Intellectual Property with respect to an Infringement Claim in South Korea; provided, however, that Yuhan shall
(x) consult with Processa in good faith with respect to any claim that any Yuhan Patent Right or Joint Patent Right is invalid
or unenforceable and (y) implement any reasonable comment from Processa regarding any aspect of defending against any such claim
described in clause (x). Any such suit by Yuhan shall be brought either in the name of Yuhan or its Affiliate, the name of Processa
or its Affiliate, or the names of Processa, Yuhan and their respective Affiliates, as may be required by the Law of the forum.
For this purpose, Processa shall execute such legal papers and cooperate in the prosecution of such suit, including providing
full access to documents, information and witnesses as reasonably requested by Yuhan in connection with such suit, as may be reasonably
requested by Yuhan; provided that Yuhan shall promptly reimburse all out-of-pocket expenses (including reasonable counsel
fees and expenses) actually incurred by Processa in connection with such cooperation. For clarity, as between Yuhan and Processa,
(A) Yuhan shall have the sole right, but not the obligation, to protect Yuhan Intellectual Property in the Territory and (B) the
Parties shall jointly determine by mutual agreement whether and how to protect Joint Intellectual Property against any suspected
misappropriation or infringement that does not constitute an Infringement Claim, and the provisions of this ARTICLE VIII shall
not apply with respect thereto.

 

(c)       Step-In
Right.

 

(i)       Step-In
by Yuhan. If Processa does not initiate a suit or take other appropriate action that it has the initial right to initiate
or take with respect to an Infringement Claim pursuant to Section 8.3(b)(i) related to the Yuhan Intellectual Property and Joint
Intellectual Property in the Territory or related to the Processa Intellectual Property anywhere in the world, then Yuhan may,
in its discretion, provide Processa with notice of Yuhan’s intent to initiate a suit or take other appropriate action. If
Yuhan provides such notice and Processa does not initiate a suit or take such other appropriate action within thirty (30) days
after receipt of such notice from Yuhan, then Yuhan shall have the right to initiate a suit or take other appropriate action that
it believes is reasonably required to protect the Yuhan Intellectual Property, Joint Intellectual Property or Processa Intellectual
Property. Any suit by Yuhan shall be either in the name of Yuhan or its Affiliate, the name of Processa or its Affiliate, or the
names of Processa, Yuhan, and their respective Affiliates, as may be required by the Law of the forum. For this purpose, Processa
shall execute such legal papers and cooperate in the prosecution of such suit, including providing full access to documents, information
and witnesses as reasonably requested by Yuhan in connection with such suit, as may be reasonably requested by Yuhan; provided
that Yuhan shall promptly reimburse all out-of-pocket expenses (including reasonable counsel fees and expenses) actually incurred
by Processa in connection with such cooperation.

 

(ii)       Step-In
by Processa. If Yuhan does not initiate a suit or take other appropriate action that it has the initial right to initiate
or take with respect to an Infringement Claim pursuant to Section 8.3(b)(ii), then Processa may, in its discretion, provide Yuhan
with notice of Processa’s intent to initiate a suit or take other appropriate action. If Processa provides such notice and
Yuhan does not initiate a suit or take such other appropriate action within thirty (30) days after receipt of such notice from
Processa, then Processa shall have the right to initiate a suit or take other appropriate action that it believes is reasonably
required to protect the Processa Intellectual Property and Joint Intellectual Property with respect to an Infringement Claim.
Any suit by Processa shall be either in the name of Yuhan or its Affiliate, the name of Processa or its Affiliate, or the names
of Processa, Yuhan, and their respective Affiliates, as may be required by the Law of the forum. For this purpose, Yuhan shall
execute such legal papers and cooperate in the prosecution of such suit, including providing full access to documents, information
and witnesses as reasonably requested by Processa in connection with such suit, as may be reasonably requested by Yuhan; provided
that Processa shall promptly reimburse all out-of-pocket expenses (including reasonable counsel fees and expenses) actually
incurred by Yuhan in connection with such cooperation.

 

    	 	29	 

     

    

 

(d)       Conduct
of Certain Actions; Costs. The Party initiating suit or taking other action with respect to an Infringement Claim shall have
the sole and exclusive right to select counsel for, and otherwise control, any suit or action initiated by it pursuant to Section
8.3(b) or Section 8.3(c). The initiating Party shall assume and pay all of its own out-of-pocket costs incurred in connection
with any litigation or proceedings initiated by it pursuant to Sections 8.3(b) and 8.3(c), including the fees and expenses of
the counsel selected by it. The other Party shall have the right to participate, but not control, and be represented in, any such
suit by its own counsel at its own expense.

 

(e)       Recoveries.
Except as otherwise agreed by the Parties as part of a cost-sharing arrangement, any
damages, settlements, accounts of profits, or other financial compensation recovered from a Third Party by the Party that assumes
control over enforcing any Infringement Claim shall be allocated between the Parties as follows:

 

(i)       first,
to reimburse the Parties’ actual out-of-pocket expenses (including reasonable counsel fees and expenses) incurred in pursuing
such Infringement Claim;

 

(ii)       second,
if Processa controlled the assertion of the Infringement Claim, (1) any remaining amount that represents compensatory damages
relating to any Compound or Product Commercialized in the Territory other than South Korea (including lost sales or lost profits)
shall be deemed Net Sales of Processa less an amount equal to Royalty payments to Yuhan on such deemed Net Sales in accordance
with the Royalty provisions of Section 7.5, which amount shall be paid to Yuhan, and (2) any remaining amount that represents
compensatory damages relating to any Compound or Product Commercialized in South Korea (including lost sales or lost profits)
shall be deemed Net Sales of Yuhan less an amount equal to Royalty payments to Processa on such deemed Net Sales in accordance
with the Royalty provisions of Section 2.1(b), which amount shall be paid to Processa; and any remaining amount that represents
punitive damages shall be shared equally by the Parties; and

 

(iii)       third,
if Yuhan controlled the assertion of the Infringement Claim, any remaining amount following reimbursement of expenses under clause
8.3(e)(i) shall be retained by Yuhan.

 

    	 	30	 

     

    

 

8.4       Patent
Invalidity Claim. Each of the Parties shall promptly notify the other in the event of any legal or administrative action by
any Third Party against a Yuhan Patent Right, Processa Patent Right or Joint Patent Right of which it becomes aware, including
any nullity, revocation, reexamination or compulsory license proceeding. Processa shall have the first right, but not the obligation,
to defend against any such action involving a Yuhan Patent Right, Processa Patent Right or Joint Patent Right, and the costs of
any such defense shall be at Processa’s expense. If Processa does not defend against any such action involving such Yuhan
Patent Right, Processa Patent Right or Joint Patent Right, then Yuhan shall have the right, but not the obligation, to defend
such action and any such defense shall be at Yuhan’s expense. Upon request of the Party that defends against any such action
involving a Yuhan Patent Rights, Processa Patent Right or Joint Patent Right, the other Party agrees to join in any such action
and to cooperate reasonably with the defending Party, including providing full access to documents, information and witnesses
as reasonably requested by the defending Party in connection with such action, provided that the defending Party shall
promptly reimburse all out-of-pocket expenses (including reasonable counsel fees and expenses) actually incurred by the other
Party in connection with such cooperation.

 

8.5       Claimed
Infringement. Each of the Parties shall promptly notify the other in the event a Party becomes aware that the practice by
either Party of the Yuhan Patent Rights infringes, or is suspected or alleged to infringe, the intellectual property rights of
any Third Party in the Territory, and shall promptly provide the other Party with any notice it receives or has received from
a Third Party related to such suspected, alleged or actual infringement.

 

8.6       Patent
Term Extensions. Processa shall have the exclusive right and obligation to seek patent term extensions or supplemental patent
protection, including supplementary protection certificates, in each country in the Territory in relation to the Products at Processa’s
expense. Yuhan and Processa shall cooperate in connection with all such activities, and Processa, its agents and attorneys will
give due consideration to all timely suggestions and comments of Yuhan regarding any such activities; provided that all
final decisions shall be made by Processa.

 

8.7       Patent
Marking. Processa shall comply with the patent marking statutes in each country in the Territory in which any Product is sold
by Processa, its Affiliates, or its Sublicensees. Yuhan shall comply with the patent marking statutes in South Korea for any Product
that is sold by Yuhan, its Affiliates, or its Sublicensees.

 

8.8       Certification
under Drug Price Competition and Patent Restoration Act.

 

(a)       Notice.
If a Party becomes aware of any certification filed pursuant to 21 U.S.C. § 355(b)(2)(A) or 355(j)(2)(A)(vii)(IV) or its
successor provisions, or any similar provision in any country other than the U.S., claiming that any Yuhan Patent Rights, Processa
Patent Rights or Joint Patent Rights are invalid or otherwise unenforceable, or that infringement will not arise from the manufacture,
use, import or sale of a product by a Third Party (a “Paragraph IV Claim”), such Party shall promptly notify
the other Party in writing within five (5) Business Days after its receipt thereof.

 

    	 	31	 

     

    

 

(b)       Control
of Response; Recoveries. Processa shall have the first right, but not the obligation, to initiate and control patent infringement
litigation for any Paragraph IV Claim; provided, however, that Processa shall (i) consult with Yuhan in good faith
with respect to any claim that any Yuhan Patent Right, Processa Patent Right or Joint Patent Right is invalid or unenforceable
and (ii) implement any comment from Yuhan regarding any aspect of defending against any such claim. Any suit by Processa shall
be brought either in the name of Yuhan or its Affiliate, the name of Processa or its Affiliate, or the names of Processa, Yuhan,
and their respective Affiliates, as may be required by the Law of the forum. For this purpose, Yuhan shall execute such legal
papers and cooperate in the prosecution of such suit, including providing full access to documents, information and witnesses,
as may be reasonably requested by Processa; provided that Processa shall promptly reimburse all out-of-pocket expenses
(including reasonable counsel fees and expenses) actually incurred by Yuhan in connection with such cooperation. If Processa elects
not to assume control over litigating any Paragraph IV Claim, Processa shall notify Yuhan as soon as practicable but in any event
not later than ten (10) days before the first action required to litigate such Paragraph IV Claim so that Yuhan may, but shall
not be required to, assume sole control over litigating such Paragraph IV Claim using counsel of its own choice. Any suit by Yuhan
shall be either in the name of Yuhan or its Affiliate, the name of Processa or its Affiliate, or the names of Processa, Yuhan,
and their respective Affiliates, as may be required by the Law of the forum. For this purpose, Processa shall execute such legal
papers and cooperate in the prosecution of such suit, including providing full access to documents, information and witnesses,
as may be reasonably requested by Yuhan; provided that Yuhan shall promptly reimburse all out-of-pocket expenses (including
reasonable counsel fees and expenses) actually incurred by Processa in connection with such cooperation. Any compensation recovered
as a result of such litigation shall be allocated as set forth in Section 8.3(e) above.

 

8.9       Privileged
Communications. In furtherance of this Agreement, it is expected that Processa and Yuhan will, from time to time, disclose
to one another privileged communications with counsel, including opinions, memoranda, letters, and other written, electronic and
verbal communications. Such disclosures are made with the understanding that they shall remain confidential, that they will not
be deemed to waive any applicable attorney-client or attorney work product or other privilege and that they are made in connection
with the shared community of legal interests existing between Yuhan and Processa, including the community of legal interests in
avoiding infringement of any valid, enforceable patents of Third Parties and maintaining the validity of Yuhan Patent Rights,
Processa Patent Rights and Joint Patent Rights.

 

8.10       Settlement.
Neither Party shall unilaterally enter into any settlement or compromise of any suit, action or proceeding under this ARTICLE
VIII that would in any manner alter, diminish, or be in derogation of the other Party’s rights under this Agreement without
the prior written consent of such other Party, which shall not be unreasonably withheld or delayed.

 

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ARTICLE
IX

CONFIDENTIAL INFORMATION

 

9.1       Treatment
of Confidential Information. During the Term and for five (5) years thereafter, each Party shall maintain Confidential Information
(as defined in Section 9.2) of the other Party in confidence, and shall not disclose, divulge or otherwise communicate such Confidential
Information to others (except for agents, directors, officers, employees, consultants, subcontractors, licensees, sublicensees,
partners, Affiliates, and advisers who have a need to know such information to perform obligations or exercise rights on behalf
of such Party (collectively, “Agents”) under obligations of confidentiality no less stringent than those set
forth in this ARTICLE IX) or use it for any purpose other than in connection with the Development, Manufacture, use or Commercialization
of Compounds or Products pursuant to this Agreement or otherwise to accomplish the purposes of this Agreement, including exercising
its rights or performing its obligations hereunder, and each Party shall exercise Commercially Reasonable Efforts to prevent and
restrain the unauthorized disclosure of such Confidential Information by any of its Agents, which efforts shall be at least as
diligent as those generally used by such Party in protecting its own confidential and proprietary information, and in any event
no less than reasonable efforts. Each Party will be responsible for any breach of this ARTICLE IX by its Agents. Either receiving
Party may disclose Confidential Information of the disclosing Party (a) to Governmental Authorities in order to comply with applicable
Laws, respond to inquiries, requests or investigations by Governmental Authorities, including filing, prosecuting or maintaining
Patent Rights as permitted by this Agreement; (b) to comply with the regulations or requirements of any stock exchange; (c) to
the extent useful to Develop, Manufacture, use or Commercialize any Compound or Product, including making regulatory filings for
any Compound or Product, in accordance with this Agreement; (d) to the extent necessary or useful in order to defend or prosecute
litigation; and (e) to potential and actual bona fide investors, acquirors and other financial or commercial partners solely
for the purpose of evaluating or carrying out an actual or potential investment, acquisition or collaboration; provided
that (x) with respect to any disclosure in accordance with Section 9.1(a), (b) or (d), the receiving Party shall promptly provide
prior notice of such disclosure to the disclosing Party and use Commercially Reasonable Efforts to avoid or minimize the degree
of such disclosure, (y) with respect to any disclosure in accordance with Section 9.1(a) or (d), the receiving Party will use
efforts to secure confidential treatment of such Confidential Information at least as diligent as such Party would use to protect
its own confidential information, but in no event less than reasonable efforts, and (z) with respect to any disclosure in accordance
with Section 9.1(e),the receiving Party shall obtain the same confidentiality obligations from any Third Parties to which it discloses
the Confidential Information of the disclosing Party as it obtains with respect to its own similar types of confidential information,
and in any event such obligations shall be no less stringent than those set forth in this ARTICLE IX.

 

9.2       Confidential
Information. “Confidential Information” means all trade secrets or other proprietary information, including
any proprietary data and materials (whether or not patentable or protectable as a trade secret), that is disclosed by a Party
to the other Party. All information disclosed prior to the Effective Date by Yuhan and/or Yuhan’s Affiliate to Processa
pursuant to the Confidentiality Agreement effective as of April 22, 2020, as amended through the Effective Date (the “Confidentiality
Agreement”), shall be deemed “Confidential Information” of Yuhan. Notwithstanding the foregoing, there shall
be excluded from the foregoing definition of Confidential Information any of the foregoing that:

 

(a)       either
before or after the date of the disclosure to the receiving Party is lawfully disclosed to the receiving Party by a Third Party
without any violation of any obligation to the other Party; or

 

(b)       either
before or after the date of the disclosure to the receiving Party, becomes published or generally known to the public through
no fault or omission on the part of the receiving Party or its Agents; or

 

(c)       is
independently developed by or for the receiving Party without reference to or reliance upon the disclosing Party’s Confidential
Information as demonstrated by contemporaneous written records of the receiving Party.

 

    	 	33	 

     

    

 

9.3       Publications.
The Parties recognize the desirability of publishing and publicly disclosing the results of clinical trials of pharmaceutical
products. Accordingly, subject to coordination through designated representatives of each Party, Processa shall be free to publicly
disclose the results of clinical trials involving Compounds or Products, subject to prior review by Yuhan for issues of patentability
and protection of its Confidential Information, in a manner consistent with all Laws applicable to Processa and best industry
practices. In addition, if Processa intends to publish articles in scientific or medical journals or to make presentations of
the results of clinical trials involving Compounds or Products, Processa shall provide Yuhan through the designated representatives
of each Party at its earliest opportunity with any proposed abstracts, manuscripts or summaries of presentations that cover the
results of Development of any Compound or Product. Yuhan shall respond promptly through its designated representative, and in
any event no later than thirty (30) days after receipt of such proposed publication or presentation, or such shorter period as
may be required by the publication. If timely requested by Yuhan, Processa agrees to allow a reasonable period (not to exceed
sixty (60) days) to permit filings for patent protection and to otherwise address issues of Confidential Information or related
competitive harm to the reasonable satisfaction of Yuhan. In addition, Processa will consider in good faith any comments furnished
by Yuhan to Processa during such period. Processa shall be responsible to assure that its Affiliates and licensees agree to, and
comply with, equivalent undertakings in favor of Yuhan. Yuhan and its Affiliates may make any publication or public disclosure
of any data concerning the Compounds or Products that existed as of the Effective Date, provided that Yuhan provides Processa
at least thirty (30) days (or such shorter period as may be required by the publication) to review such publication or public
disclosure, allows a reasonable period (not to exceed sixty (60) days) to permit filings for patent protection and to otherwise
address issues of Confidential Information or related competitive harm to the reasonable satisfaction of Processa, and reasonably
considers any timely comments provided by Processa with respect to such publication or public disclosure. Yuhan shall not, and
shall cause each of its Affiliates, licensees, and sublicensees not to, make any other publications or public disclosures regarding
the Compounds or Products without Processa’s prior written consent. If Processa consents to Yuhan making such publications,
Yuhan shall provide Processa a reasonable opportunity to comment on any such publications and such comments shall not be unreasonably
rejected. All publications involving Compounds or Products shall include appropriate acknowledgement consistent with standard
scientific practice of any contributions of each Party to the results being publicly disclosed.

 

9.4       Press
Releases and Other Disclosures. The Parties recognize that each Party may from time to time desire to issue press releases
and make other public statements or disclosures regarding the subject matter of this Agreement. In such event, the Party desiring
to issue a press release or make a public statement or disclosure shall provide the other Party with a copy of the proposed press
release, statement or disclosure for review and approval in advance (except that neither Party shall have any obligation to disclose
or approve the disclosure of Confidential Information except to the extent required or permitted pursuant to this ARTICLE IX).
No other public statement or disclosure concerning the existence or terms of this Agreement shall be made, either directly or
indirectly, by either Party, without first obtaining the written approval of the other Party. Once any public statement or disclosure
has been approved in accordance with this Section 9.4, then either Party may appropriately communicate information contained in
such permitted statement or disclosure. Notwithstanding the foregoing provisions of this Section 9.4 this ARTICLE IX, a Party
may (a) disclose the existence and terms of this Agreement where required, as reasonably determined by the disclosing Party, by
applicable Law, by applicable stock exchange regulation or by order or other ruling of a competent court and (b) disclose the
existence and terms of this Agreement under obligations of confidentiality no less stringent than those set forth in this ARTICLE
IX to agents, advisors, contractors, licensees, sublicensees, and bona fide investors, acquirors and other financial or
commercial partners, and to potential agents, advisors, contractors, licensees, sublicensees, and bona fide investors,
acquirors and other financial or commercial partners. To the extent a Party determines in good faith that it is required by applicable
Law to publicly file, register or notify this Agreement with a Governmental Authority, including public filings pursuant to securities
Laws, it shall provide a proposed redacted form of the Agreement to the other Party a reasonable amount of time prior to filing
for the other Party to review such draft and propose changes to such proposed redactions. The Party making such filing, registration
or notification shall incorporate any proposed changes timely requested by the other Party, absent a reasonable basis for not
making such changes, and shall use Commercially Reasonable Efforts to seek confidential treatment for any terms that the other
Party timely requests be kept confidential, to the extent such confidential treatment is reasonably available consistent with
applicable Law. Each Party shall be responsible for its own legal and other external costs in connection with any such filing,
registration, or notification.

 

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9.5       Equitable
Relief. Given the nature of the Confidential Information and the competitive damage that a Party would suffer upon unauthorized
disclosure, use, or transfer of its Confidential Information to any Third Party, the Parties agree that monetary damages would
not be a sufficient remedy for any breach of this ARTICLE IX. In addition to all other remedies, a Party shall be entitled to
seek specific performance and injunctive and other equitable relief as a remedy for any breach or threatened breach of this ARTICLE
IX.

 

ARTICLE
X

REPRESENTATIONS, WARRANTIES AND COVENANTS

 

10.1       Yuhan’s
Representations. Yuhan hereby represents and warrants as of the Effective Date as follows:

 

(a)       Yuhan
has the corporate power and authority to execute and deliver this Agreement and to perform its obligations hereunder. The execution,
delivery, and performance of this Agreement has been duly and validly authorized and approved by all necessary corporate action
on the part of Yuhan. Yuhan has taken all other action required by Law, its certificate of incorporation or by-laws, or any agreement
to which it is a party or by which it or its assets are bound, to authorize such execution, delivery, and performance. Assuming
due authorization, execution, and delivery on the part of Processa, this Agreement constitutes a legal, valid, and binding obligation
of Yuhan, enforceable against Yuhan in accordance with its terms.

 

(b)       The
execution and delivery of this Agreement by Yuhan do not require Yuhan to obtain any permit, authorization or consent from any
Governmental Authority or from any other Person which has not been obtained prior to the Effective Date, and such execution and
delivery by Yuhan will not result in the breach of or give rise to any termination of, rescission, renegotiation or acceleration
under or trigger any other rights under any agreement or contract to which Yuhan may be a party that relates to the Yuhan Patent
Rights or the Yuhan Know-How.

 

    	 	35	 

     

    

 

(c)       Schedule
1.57 is a complete and correct list of all Patent Rights owned by Yuhan as of the Effective Date that Cover any Compound or
Product. No Patent Right that covers any Compound or Product has been licensed to Yuhan.

 

(d)       Yuhan
is the legal and beneficial owner of all the Patent Rights identified on Schedule 1.57. To Yuhan’s knowledge, all
assignments to Yuhan of ownership rights relating to such Patent Rights are valid and enforceable and free and clear of any liens,
security interests or other similar encumbrances that would impair or limit the license rights granted under this Agreement. All
of the Patent Rights listed identified on Schedule 1.57 that are issued patents are in full force and effect, and all applicable
filing, maintenance and other fees required to be paid to a patent office with respect to the Patent Rights listed identified
on Schedule 1.57 have been timely paid. Yuhan has the right to grant the licenses granted by it in this Agreement and has
not previously assigned, transferred, conveyed or otherwise encumbered its right, title and interest in the Yuhan Intellectual
Property in a manner that conflicts with any rights granted to Processa hereunder.

 

(e)       There
is no action, claim, demand, suit, proceeding, arbitration, grievance, citation, summons, subpoena, inquiry, or investigation
of any nature, civil, criminal, regulatory, or otherwise, in law or in equity, pending or, to Yuhan’s knowledge, threatened
against Yuhan in connection with the Compounds or Products or any Yuhan Patent Rights, Yuhan Know-How or against or relating to
the transactions contemplated by this Agreement. Yuhan has not received any written notice from a Third Party that the Development
of any Compound or Product conducted by Yuhan has infringed or misappropriated, or that any Development or Commercialization of
any Compound or Product will infringe or misappropriate, any Patent Rights or Know-How of any Third Party.

 

(f)       No
claim or action has been brought or, to Yuhan’s knowledge, threatened by any Third Party alleging that the Yuhan Patent
Rights are invalid or unenforceable, and no Yuhan Patent Rights are the subject of any litigation, interference, post-grant review,
opposition, cancellation or other proceeding challenging the validity or enforceability of the Yuhan Patent Rights.

 

(g)       Neither
Yuhan nor, to the knowledge of Yuhan, any of its directors, officers, employees, agents or subcontractors has been convicted of
any crime or engaged in any conduct that has resulted in, or would reasonably be expected to result, in debarment by the FDA under
21 U.S.C. § 335a or any similar state or foreign Law.

 

10.2       Processa’s
Representations. Processa hereby represents and warrants as of the Effective Date as follows:

 

(a)       Processa
has the corporate power and authority to execute and deliver this Agreement and to perform its obligations hereunder. The execution,
delivery, and performance of this Agreement has been duly and validly authorized and approved by all necessary corporate action
on the part of Processa. Processa has taken all other action required by Law, its certificate of incorporation or by-laws or any
agreement to which it is a party or by which it or its assets are bound to authorize such execution, delivery and (subject to
obtaining all necessary governmental approvals with respect to the Development, Manufacture, use and Commercialization of Compounds
and Products) performance. Assuming due authorization, execution, and delivery on the part of Yuhan, this Agreement constitutes
a legal, valid, and binding obligation of Processa, enforceable against Processa in accordance with its terms.

 

    	 	36	 

     

    

 

(b)       The
execution and delivery of this Agreement by Processa will not violate any U.S. Law or, to Processa’s knowledge, any Law
of any Governmental Authority outside the U.S.

 

(c)       There
is no action, claim, demand, suit, proceeding, arbitration, grievance, citation, summons, subpoena, inquiry or investigation of
any nature, civil, criminal, regulatory or otherwise, in law or in equity, pending or, to the knowledge of Processa, threatened
against Processa in connection with or relating to the transactions contemplated by this Agreement.

 

(d)       The
execution and delivery of this Agreement do not require Processa to obtain any permit, authorization or consent from any Governmental
Authority or from any other Person, and such execution and delivery by Processa will not result in the breach of or give rise
to any termination of, rescission, renegotiation or acceleration under or trigger any other rights under any agreement or contract
to which Processa may be a party that relates to the Products, Processa Patent Rights or Processa Know-How.

 

(e)       Neither
Processa nor, to the knowledge of Processa, any of its directors, officers, employees, agents or subcontractors has been convicted
of any crime or engaged in any conduct that has resulted in, or would reasonably be expected to result, in debarment by the FDA
under 21 U.S.C. § 335a or any similar state or foreign Law.

 

10.3       Yuhan
Covenants. Yuhan covenants and agrees during the Term that, subject to Processa’s, its Affiliates’ and Sublicensees’
performance of their obligations under this Agreement:

 

(a)       Yuhan
shall not grant to any Third Party any rights that would be inconsistent or conflict with Processa’s rights hereunder.

 

(b)       Subject
to Section 13.7, Yuhan shall not assign, transfer, convey, or otherwise encumber its right, title, and interest in the Yuhan Intellectual
Property in a manner that conflicts with any rights granted to Processa hereunder.

 

10.4       Processa
Covenants.

 

(a)       Processa
shall conduct, and shall cause its contractors and consultants to conduct, all of their activities contemplated under this Agreement
in accordance with all applicable Laws of the country in which such activities are conducted, including applicable requirements
of “good laboratory practices,” “good clinical practices,” and “good manufacturing practices,”
as applicable, as defined by the FDA.

 

(b)       Subject
to Section 13.7, Processa shall not assign, transfer, convey, or otherwise encumber its right, title, and interest in the Processa
Intellectual Property in a manner that conflicts with any rights granted hereunder to Yuhan upon termination.

 

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10.5       No
Warranty. EXCEPT AS OTHERWISE EXPRESSLY SET FORTH IN THIS AGREEMENT, NEITHER PARTY MAKES ANY REPRESENTATION OR EXTENDS ANY
WARRANTY OF ANY KIND, EITHER EXPRESS OR IMPLIED. IN PARTICULAR, BUT WITHOUT LIMITATION, EXCEPT AS OTHERWISE EXPRESSLY SET FORTH
IN THIS AGREEMENT, NEITHER PARTY MAKES ANY REPRESENTATION OR EXTENDS ANY WARRANTY CONCERNING WHETHER ANY OF THE COMPOUNDS OR PRODUCTS
ARE FIT FOR ANY PARTICULAR PURPOSE OR SAFE FOR HUMAN CONSUMPTION.

 

ARTICLE
XI

INDEMNIFICATION

 

11.1       Indemnification
in Favor of Yuhan. Processa shall indemnify, defend and hold harmless the Yuhan Parties from and against any and all Losses
incurred, suffered or sustained by any of the Yuhan Parties or to which any of the Yuhan Parties becomes subject as a result of
any Third Party claim, action, suit, proceeding, liability or obligation (which in no event includes any claim by any Processa
Party or any Yuhan Party) (collectively, “Third Party Claims”) arising out of, relating to or resulting from:

 

(a)       any
misrepresentation or breach of any representation, warranty, covenant or agreement made by Processa in this Agreement; or

 

(b)       the
Development Manufacture or Commercialization of Compounds or Products by Processa, its Affiliates or Sublicensees, including all
Third Party Claims involving death or bodily injury caused or allegedly caused by the use of such a Compound or Product, and even
if such a Compound or Product is altered for use for a purpose not intended (any and all such Third Party Claims “Product
Liability Claims”); or

 

(c)       any
actual or alleged infringement of any trademark, Patent Right or other intellectual property right, or misappropriation of any
trade secret, of any Third Party as a result of the Development, Manufacture or Commercialization of Compounds or Products by
Processa, its Affiliates or Sublicensees; or

 

(d)       the
gross negligence or willful misconduct of any of the Processa Parties (as hereinafter defined) in connection with Processa’s
performance of this Agreement.

 

For
purposes of this ARTICLE XI, “Yuhan Parties” means Yuhan, its Affiliates and their respective agents, directors,
officers, licensees, sublicensees and employees.

 

The
indemnification obligations set forth in this Section 11.1 shall not apply to the extent that any Loss is the result of (i) a
breach of any representation, warranty, covenant, or agreement made by Yuhan in this Agreement or (ii) the gross negligence or
willful misconduct of any applicable Yuhan Party.

 

    	 	38	 

     

    

 

11.2       Indemnification
in Favor of Processa. Yuhan shall indemnify, defend and hold harmless the Processa Parties from and against any and all Losses
incurred, suffered or sustained by any of the Processa Parties or to which any of the Processa Parties becomes subject as a result
of any Third Party Claim arising out of, relating to or resulting from:

 

(a)       any
misrepresentation or breach of any representation, warranty, covenant or agreement made by Yuhan in this Agreement; or

 

(b)       the
Development, Manufacture or Commercialization of Compounds or Products by Yuhan, its Affiliates, licensees (excluding Processa)
or sublicensees prior to the execution of this Agreement and after any termination of this Agreement, including all Product Liability
Claims arising out of any such pre-Agreement, post-termination Development, Manufacture or Commercialization by Yuhan, its Affiliates,
licensees (excluding Processa) or sublicensees; or

 

(c)       any
actual or alleged infringement of any trademark, Patent Right or other intellectual property right, or misappropriation of any
trade secret, of any Third Party as a result of the Development, Manufacture or Commercialization of Compounds or Products by
Yuhan, its Affiliates, licensees (excluding Processa) or sublicensees prior to the execution of this Agreement and after any termination
of this Agreement; or

 

(d)       the
gross negligence or willful misconduct of any of the Yuhan Parties in connection with Yuhan’s performance of this Agreement.

 

For
purposes of this ARTICLE XI, “Processa Parties” means Processa, its Affiliates and their respective agents,
directors, officers, licensees, sublicensees and employees.

 

The
indemnification obligations set forth in this Section 11.2 shall not apply to the extent that any Loss is the result of (i) a
breach of any representation, warranty, covenant, or agreement made by Processa in this Agreement, or (ii) the gross negligence
or willful misconduct of any applicable Processa Party.

 

11.3       General
Indemnification Procedures.

 

(a)       A
Yuhan Party or Processa Party seeking indemnification pursuant to this ARTICLE XI (an “Indemnified Party”)
shall give prompt notice to the Party from whom such indemnification is sought (the “Indemnifying Party”) of
the commencement or assertion of any Third Party Claim in respect of which indemnity may be sought hereunder, shall give the Indemnifying
Party such information with respect to any indemnified matter as the Indemnifying Party may reasonably request, and shall not
make any admission concerning any Third Party Claim, unless such admission is required by applicable Law or legal process, including
in response to questions presented in depositions or interrogatories. Any admission made by the Indemnified Party or the failure
to give such notice shall relieve the Indemnifying Party of any liability hereunder only to the extent that the ability of the
Indemnifying Party to defend such Third Party Claim is prejudiced thereby (and no admission required by applicable Law or legal
process shall be deemed to result in prejudice). The Indemnifying Party shall assume and conduct the defense of such Third Party
Claim, with counsel selected by the Indemnifying Party and reasonably acceptable to the Indemnified Party. Subject to the initial
and continuing satisfaction of the terms and conditions of this ARTICLE XI by the Indemnifying Party, the Indemnifying Party shall
have full control of such Third Party Claim, including settlement negotiations and any legal proceedings. If the Indemnifying
Party does not assume the defense of such Third Party Claim in accordance with this Section 11.3, the Indemnified Party may defend
the Third Party Claim. If both Parties are Indemnifying Parties with respect to the same Third Party Claim, the Parties shall
determine by mutual agreement, within twenty (20) days following their receipt of notice of commencement or assertion of such
Third Party Claim (or such lesser period of time as may be required to respond properly to such claim), which Party shall assume
the lead role in the defense thereof. Should the Indemnifying Parties be unable to mutually agree on which of them shall assume
the lead role in the defense of such Third Party Claim, both Indemnifying Parties shall be entitled to participate in such defense
through counsel of their respective choosing.

 

    	 	39	 

     

    

 

(b)       Any
Indemnified Party or Indemnifying Party not managing the defense of a Third Party Claim shall have the right to participate in
(but not control), at its own expense (subject to the immediately succeeding sentence), the defense. The Indemnifying Party managing
the defense shall not be liable for any litigation cost or expense incurred, without its consent, by the Indemnified Party where
the action or proceeding is under the control of such Indemnifying Party; provided, however, that, if the Indemnifying
Party managing the defense fails to take reasonable steps necessary to defend such Third Party Claim, the Indemnified Party may
assume its own defense, and the Indemnifying Party managing the defense will be liable for all reasonable costs or expenses paid
or incurred in connection therewith.

 

(c)       The
Indemnifying Party shall not, except with the consent of the Indemnified Party, consent to a settlement of, or the entry of any
judgment against, an Indemnified Party arising from any Third Party Claim to the extent such settlement or judgment involves equitable
or other non-monetary relief from the Indemnified Party. No Party shall, without the prior written consent of the other Party
or the Indemnified Party, enter into any compromise or settlement that commits the other Party or the Indemnified Party to take,
or to forbear to take, any action.

 

(d)       The
Parties shall cooperate in the defense or prosecution of any Third Party Claim and shall furnish such records, information and
testimony, and attend such conferences, discovery proceedings, hearings, trials and appeals, as may be reasonably requested in
connection therewith; provided, however, that the Indemnifying Party shall reimburse the Indemnified Party for any
out-of-pocket expenses actually and reasonably incurred in connection with any such cooperation.

 

(e)       Any
indemnification hereunder shall be made net of any insurance proceeds actually recovered by the Indemnified Party from unaffiliated
Third Parties; provided, however, that if, following the payment to the Indemnified Party of any amount under this
ARTICLE XI, such Indemnified Party recovers any such insurance proceeds in respect of the claim for which such indemnification
payment was made, the Indemnified Party shall promptly pay an amount equal to the amount of such proceeds (but not exceeding the
amount of such net indemnification payment) to the Indemnifying Party.

 

(f)       The
Parties agree and acknowledge that the provisions of this ARTICLE XI represent the Indemnified Party’s exclusive recourse
with respect to any Losses for Third Party Claims for which indemnification is provided to the Indemnified Party under this ARTICLE
XI.

 

    	 	40	 

     

    

 

11.4       Insurance.
During the Term, for so long as a Third Party Claim may be brought for which Processa must indemnify Yuhan pursuant to Section
11.1, Processa shall obtain and maintain, at its sole cost and expense, product liability insurance in amounts that are reasonable
and customary in the pharmaceutical industry, but in no event less than $5 million per occurrence or claim, and $10 million in
the aggregate, or a comparable program of self-insurance. Such product liability insurance shall insure against all liability,
including product liability and property damage arising out of the Development, use or Commercialization of Compounds and Products
by Processa, its Affiliates, or Sublicensees in the Territory. Without limiting the generality of the foregoing, Processa shall
maintain comprehensive general liability insurance, including product liability insurance, to cover its activities and, unless
its Affiliates and Sublicensees maintain comparable coverage, the activities of its Affiliates and Sublicensees, with respect
to Compounds and Products. Processa shall provide satisfactory evidence of adequate insurance coverage to Yuhan upon the request
of Yuhan, and upon any cancellation, non-renewal, replacement, or material change in such insurance.

 

ARTICLE
XII

TERM AND TERMINATION

 

12.1       Term.
The term of this Agreement (the “Term”) shall commence on the Effective Date and, unless earlier terminated
as provided in this ARTICLE XII, shall continue in full force and effect until the expiration of the last Royalty Term. In the
Territory, on a country-by-country and Product-by-Product basis, upon the expiration of the Royalty Term in such country with
respect to such Product, Processa shall have a fully paid-up, perpetual, irrevocable, non-exclusive license under the Yuhan Intellectual
Property and Yuhan’s interest in the Joint Intellectual Property with respect to such Product in such country.

 

12.2       Termination
for Convenience. Processa shall have the right upon sixty (60) days prior written notice to Yuhan to terminate this Agreement
in its entirety for any reason.

 

12.3       Termination
for Cause. In the event of a material breach of this Agreement by a Party, the other Party may give the Party in default notice
requiring it to cure such default, which notice shall specify the nature of the breach. If such material breach is not cured within
forty-five (45) days after receipt of such notice (or within fifteen (15) days in the case of a payment breach), the notifying
Party shall be entitled (without prejudice to any other rights conferred on it by this Agreement or under applicable Law) to terminate
this Agreement by giving written notice to the defaulting Party. The right of either Party to terminate this Agreement as set
forth in this Section 12.3 shall not be affected in any way by its waiver of, or failure to take action with respect to, any previous
default.

 

12.4       Additional
Termination by Yuhan. In the event that Yuhan has provided written notice to Processa pursuant to Section 6.2, if Processa
does not respond to Yuhan in writing within ninety (90) days of receipt of such notice from Yuhan and reasonably demonstrate in
such response compliance with Processa’s obligations under Section 6.1, Yuhan shall be entitled (without prejudice to any
other rights conferred on it by this Agreement or under applicable Law) to terminate this Agreement by giving written notice to
Processa.

 

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12.5       Termination
for Insolvency. This Agreement may be terminated by a Party upon written notice to the other Party if (a) the other Party
shall make an assignment for the benefit of its creditors, file a petition in bankruptcy, petition or apply to any tribunal for
the appointment of a custodian, receiver or trustee for it or a substantial part of its assets, or shall commence any proceeding
under any bankruptcy, reorganization, readjustment of debt, dissolution or liquidation law or statute of any jurisdiction, whether
now or hereafter in effect; or (b) if there shall have been filed against the other Party any such bona fide petition or
application, or any such proceeding shall have been commenced against it, in which an order for relief is entered or that remains
undismissed or unstayed for a period of ninety (90) days or more; or (c) if the other Party by any act or omission shall consent
to, approve of or acquiesce in any such petition, application or proceeding or order for relief or the appointment of a custodian,
receiver or trustee for it or any substantial part of its assets, or shall suffer any such custodianship, receivership or trusteeship
to continue undischarged or unstayed for a period of ninety (90) days or more. Termination shall be effective upon the date specified
in such notice.

 

 

12.6       Termination
for Challenge of Patent Rights. If a Party or any of the Party’s Affiliates or Sublicensees commences an action in any
court or tribunal of competent jurisdiction that challenges, opposes or disputes the validity, enforceability or patentability
of any of the other Party’s Patent Rights that are the subject of this Agreement, or any of the claims thereof, or supports
or assists any Third Party that commences such an action in any such court or tribunal, the other Party shall have the right to
terminate this Agreement upon notice to the Party; provided, however, that the other Party shall not have a right
to terminate if the challenge is brought by a Sublicensee, either directly or indirectly through any Third Party, and the Party
or the Affiliate, as the case may be, terminates such Sublicensee’s sublicense rights hereunder within thirty (30) days
after becoming aware of such challenge.

 

12.7       Consequences
of Termination. If this Agreement (x) is terminated by Yuhan under Section 12.3, 12.4, 12.5 or 12.6, (y) is terminated by
Processa under Section 12.2, or (z) is terminated by Processa under Section 12.3 or 12.5, then the licenses granted to Processa
in Section 2.1 and, except as provided in this Section 12.7 and Sections 12.8 and 12.9 (and any Articles and Sections referenced
therein), all other rights and obligations of the Parties under this Agreement shall terminate. Upon a termination described in
clause (x) (but not clause (y) or (z)) of this Section 12.7, clause (a) shall apply, and, upon a termination described in clause
(x) or (y) (but not clause (z)), Processa shall grant, and shall cause any applicable Affiliate to grant, Yuhan any combination
of the following clauses (b) through (f) elected by Yuhan:

 

(a)       Sublicenses.
Yuhan hereby grants, effective automatically upon any termination of this Agreement by Yuhan pursuant to Section 12.3, 12.4, 12.5
or 12.6, a direct license to each then-existing Sublicensee, provided that (i) such Sublicensee is not in breach under the applicable
sublicense, (ii) such Sublicensee’s failure to comply with the terms of its sublicense or other actions or omissions were
not a basis for such termination, and (iii) such Sublicensee continues to satisfy all obligations under this Agreement applicable
to such sublicense, including the diligence obligations set forth in ARTICLE VI and all payment obligations under the then-existing
Sublicensee agreement (except that such payments for the sublicenses shall be made directly to Yuhan), from and after the date
that such direct license becomes effective. For clarity, Yuhan shall not be bound to any responsibility or liability of Processa
under its sublicense agreements that has already accrued at the time of such termination of this Agreement by Yuhan pursuant to
Section 12.3, 12.4, 12.5, or 12.6, or that is attributable to a period prior to such termination

 

    	 	42	 

     

    

 

(b)       Regulatory
Matters. Ownership of all filings with Regulatory Authorities in the Territory relating to Compounds and Products and Regulatory
Approvals relating to Compounds and Products held Processa or its Affiliates or applicable Sublicensees, including related correspondence
with Regulatory Authorities, and Processa shall provide copies thereof to Yuhan;

 

(c)       Pre-clinical
and Clinical Matters. Possession of all pre-clinical and clinical data, including pharmacology and biology data, within the
Processa Know-How and applicable Sublicensee Intellectual Property;

 

(d)       Manufacturing
Matters. At Yuhan’s option, to be exercised no later than the later of (x) thirty (30) days after the Effective Date
of termination or (y) thirty (30) days after Yuhan’s receipt of the applicable Manufacturing agreements,

 

(i)       use
of Commercially Reasonable Efforts by Processa and its Affiliates and applicable Sublicensees to effect the assignment of each
Manufacturing agreement specific and exclusive to Compounds or Products to Yuhan, if such agreement is then in effect and such
assignment is permitted under such agreement or by the applicable Third Party; provided that Processa and its applicable
Affiliates and applicable Sublicensees shall be released to the extent the applicable Third Party will permit from any obligation
arising out of such agreement following such assignment and Yuhan shall execute such documentation reasonably satisfactory to
Processa to effectuate such agreement; provided further that if any such agreement is specific but not exclusive to Compounds
or Products, or is not assigned to Yuhan for any reason, Processa will discuss in good faith with Yuhan terms upon which Processa
and its Affiliates and applicable Sublicensees shall use Commercially Reasonable Efforts to provide Yuhan with the benefits of
such agreement to the extent it relates to Compounds or Products for a limited period of time (not to exceed six (6) months) and
upon payment of a reasonably acceptable fee to Processa;

 

(ii)       for
a period of up to six (6) months following the Effective Date of termination, (A) cooperation with Yuhan in reasonable respects
to transfer Manufacturing documents and materials within the Processa Know-How and applicable Sublicensee Intellectual Property
that are used (at the time of the termination) by Processa or its Affiliates or applicable Sublicensees exclusively in the Manufacture
of Compounds and Products to the extent such Manufacturing documents and materials are not obtained by Yuhan pursuant to the assignment
of agreements pursuant to paragraph (i) above, and (B) cooperation with Yuhan to provide Yuhan with reasonable access to and right
to use such Manufacturing documents and materials in Processa’s or its Affiliates’ or applicable Sublicensees’
possession or Control to the extent they relate to, but are not used exclusively in, the Manufacture of Compounds and Products,
subject to appropriate confidentiality and limitation on use protections applicable to for Manufacturing documents and materials;

 

(iii)       for
a period of up to six (6) months following the Effective Date of termination, (A) cooperation with Yuhan in reasonable respects
to transfer Manufacturing technologies within the Processa Intellectual Property and applicable Sublicensee Intellectual Property
that are used (at the time of the termination) by Processa or its Affiliates or applicable Sublicensees exclusively in the Manufacture
of Compounds and Products, and (B) cooperation with Yuhan to provide Yuhan with reasonable access to and right to use such Manufacturing
technologies Controlled by Processa or its Affiliates (other than Processa Excluded Affiliates) or applicable Sublicensees to
the extent they relate to, but are not used exclusively in, the Manufacture of Compounds and Products and that Processa or such
Affiliates or Sublicensees are permitted to provide such access to Yuhan; provided that Yuhan shall reimburse Processa
for Processa’s reasonable out-of-pocket expenses to provide such requested assistance, to the extent such Manufacturing
technologies are not obtained by Yuhan pursuant to the assignment of agreements pursuant to paragraph (i) above; and

 

    	 	43	 

     

    

 

(iv)       sale
of Processa’s or its Affiliates’ or applicable Sublicensees’ then-existing inventory of Compounds and Products
to Yuhan, at Processa’s or its applicable Affiliates’ or applicable Sublicensees’ cost of Manufacture, but only
if the following conditions have been met: (A) such Compounds and Products meet the applicable release specifications; and (B)
Processa does not reasonably believe the continued use of such Compounds and Products causes safety concerns;

 

(e)       License
Grant. At Yuhan’s option, to be exercised by written notice to Processa no later than thirty (30) days after the Effective
Date of termination, a worldwide license, with the right to sublicense, under the Processa Patent Rights, Processa Know-How, Processa’s
interest in the Joint Intellectual Property, and applicable Sublicensee Intellectual Property, solely to make, have made, use,
sell, offer for sale and import Compounds and Products in the Field that were Developed or Commercialized prior to the Effective
Date of termination, which license would be, at Yuhan’s election, either (i) non-exclusive, fully paid-up, non-royalty-bearing,
irrevocable and perpetual or (ii) exclusive and royalty-bearing subject to mutual agreement by Yuhan and Processa on commercially
reasonable terms; provided that, notwithstanding the foregoing, with respect to any Processa Patent Rights or Processa
Know-How that Processa acquired from a Third Party (by license or otherwise), or any applicable Sublicensee Intellectual Property
that the applicable Sublicensee(s) acquired from a Third Party (by license or otherwise), Processa or the applicable Sublicensee(s)
shall only be required to grant to Yuhan a license to such Processa Patent Rights, Processa Know-How or Sublicensee Intellectual
Property to the extent permitted under the applicable agreement with such Third Party, and Yuhan shall pay Processa or such Sublicensee
or such Third Party, as determined by Processa, any payment due to such Third Party relating to the Compounds and Products; provided
further that Yuhan shall execute such documentation reasonably satisfactory to Processa to effectuate such agreement; and
if the license granted to Yuhan is exclusive, Yuhan shall have the same enforcement rights with respect to any Processa Patent
Rights and Patent Rights within the Sublicensee Intellectual Property that exclusively Cover Products that are licensed to Yuhan
pursuant to this Section 12.7(e) as Processa has with respect to Infringement Claims pursuant to Section 8.3 (to the extent that
Processa or the applicable Sublicensee(s) have such rights with respect to such Processa Patent Rights or Patent Rights within
the Sublicensee Intellectual Property, as applicable), provided that any enforcement of Processa Patent Rights, Joint Patent
Rights or Patent Rights within the Sublicensee Intellectual Property that Cover subject matter other than such Products shall
be performed by Yuhan only with the consultation and prior agreement of Processa or the applicable Sublicensee, which such agreement
shall not unreasonably withheld, delayed or conditioned.

 

(f)       Assignment
of Trademarks. Assign to Yuhan all of Processa’s or its applicable Sublicensees’ right, title and interest in
any trademark owned by Processa or its Affiliates or applicable Sublicensees and used solely in connection with the Products,
along with all associated goodwill.

 

    	 	44	 

     

    

 

12.8       Effect
of Termination or Expiration; Accrued Rights and Obligations. Termination or expiration of this Agreement for any reason shall
not release either Party from any liability that, at the time of such termination or expiration, has already accrued or that is
attributable to a period prior to such termination (including payment obligations accrued prior to the Effective Date of termination
or expiration pursuant to ARTICLE VII) nor preclude either Party from pursuing any right or remedy it may have hereunder or at
Law or in equity with respect to any breach of this Agreement.

 

12.9       Survival.
The rights and obligations set forth in this Agreement shall extend beyond the Term or termination or expiration of this Agreement
only to the extent expressly provided for in this Agreement or to the extent required to give effect to a termination or expiration
of this Agreement or the consequences of a termination or expiration of this Agreement as expressly provided for in this Agreement.
Without limiting the generality of the foregoing, it is agreed that the provisions of ARTICLE I, Sections 2.2, 2.3, 7.8 (only
for thirty-six (36) months after expiration or termination), 7.9, 7.10, 7.11, 7.12, 8.1, 8.9, 9.1, 9.2, 9.5, 10.5, ARTICLE XI,
and Sections 12.1 (last sentence as to any such license that became perpetual and irrevocable prior to expiration or termination),
12.7, 12.8, 12.9 and ARTICLE XIII shall survive expiration or termination of this Agreement for any reason.

 

ARTICLE
XIII

MISCELLANEOUS

 

13.1       Governing
Law; Jurisdiction. This Agreement shall be governed by and interpreted in accordance with the laws of the state of New York,
without regard to its conflicts of laws rules. Each Party (a) irrevocably submits to the exclusive jurisdiction in the state court
sitting in New York (collectively, the “Courts”), for purposes of any action, suit or other proceeding arising
out of this Agreement, and (b) agrees not to raise any objection at any time to the laying or maintaining of the venue of any
such action, suit or proceeding in any of the Courts, irrevocably waives any claim that such action, suit or other proceeding
has been brought in an inconvenient forum and further irrevocably waives the right to object, with respect to such action, suit
or other proceeding, that such Court does not have any jurisdiction over such Party. Either Party may serve any process required
by such Courts by way of notice under this Agreement. Notwithstanding anything to the contrary in this Section 13.1, each Party
shall have the right to institute judicial proceedings against the other Party or anyone acting by, through, or under such other
Party, in any court of competent jurisdiction, in order to enforce the instituting Party’s rights hereunder through reformation
of contract, specific performance, injunction, or similar equitable relief.

 

13.2       Dispute
Resolution. In the event of a dispute arising out of or relating to this Agreement, either Party shall provide written notice
of the dispute to the other, in which event the dispute shall be referred to the Senior Executives of each Party, for attempted
resolution by good faith negotiations within twenty (20) days after such notice is received. In the event the Senior Executives
do not resolve such dispute within the allotted twenty (20) days, either Party may, after the expiration of the twenty (20) day
period, seek to resolve the dispute in accordance with Section 13.1.

 

    	 	45	 

     

    

 

13.3       Waiver.
Waiver by a Party of a breach hereunder by the other Party shall not be construed as a waiver of any succeeding breach of the
same or any other provision. No delay or omission by a Party to exercise or avail itself of any right, power, or privilege that
it has or may have hereunder shall operate as a waiver of any right, power, or privilege by such Party. No waiver shall be effective
unless made in writing with specific reference to the relevant provision(s) of this Agreement and signed by a duly authorized
representative of the Party granting the waiver.

 

13.4       Notices.
All notices, instructions and other communications hereunder or in connection herewith shall be in writing, shall be sent to the
address specified in this Section 13.4 and shall be: (a) delivered personally; (b) sent by registered or certified mail, return
receipt requested, postage prepaid; (c) sent via a reputable nationwide overnight courier service; or (d) sent by facsimile or
other electronic transmission. Any such notice, instruction or communication shall be deemed to have been delivered upon receipt
if delivered by hand, three (3) Business Days after it is sent by registered or certified mail, return receipt requested, postage
prepaid, one (1) Business Day after it is sent via a reputable nationwide overnight courier service, or when transmitted with
confirmation of receipt, if transmitted by facsimile or other electronic transmission (if such transmission is on a Business Day;
otherwise, on the next Business Day following such transmission).

 

Notices
to Processa shall be addressed to:

 

Processa
Pharmaceuticals, Inc.

7380
Coca Cola Drive, Suite 106

Hanover,
MD 21076

Attn:
Wendy Guy, Chief Administrative Officer

Email:
wguy@processapharmaceuticals.com

 

Notices
to Yuhan shall be addressed to:

 

Yuhan
Corporation

74,
Noryangjin-ro, Dongjak-gu

Seoul,
Republic of Korea, 06927

Attention:
Taejin Yoon, Head of Global Business Development

Email:
tyoon@yuhan.co.kr

Facsimile:
82-2-828-0086

 

Yuhan
Corporation

74,
Noryangjin-ro, Dongjak-gu

Seoul,
Republic of Korea, 06927

Attention:
Han K. Kim, Head of Global Operations

Email:
hkkim@yuhan.co.kr

Facsimile:
82-2-828-0086

 

Either
Party may change its address by giving notice to the other Party in the manner provided above.

 

    	 	46	 

     

    

 

13.5       Entire
Agreement. This Agreement (including Schedules) contains the complete understanding of the Parties with respect to the subject
matter of this Agreement and supersedes all prior understandings and writings between the Parties relating to such subject matter.

 

13.6       Severability.
If any provision of this Agreement is held unenforceable by a court or tribunal of competent jurisdiction because it is invalid
or conflicts with any Law of any relevant jurisdiction, the validity of the remaining provisions shall not be affected. In such
event, the Parties shall negotiate a substitute provision that, to the extent possible, accomplishes the original business purpose.

 

13.7       Assignment.
Neither this Agreement nor any right or obligation hereunder may be assigned or otherwise transferred by any Party without the
consent of the other Party; provided, however, that any Party may, without such consent, assign this Agreement,
in whole or in part: (a) to any of its respective Affiliates, provided that such Affiliate has acknowledged and confirmed
in writing that effective as of such assignment, such Affiliate shall be bound by this Agreement to the identical extent applicable
to the assigning Party; or (b) to any successor in interest by way of merger, acquisition or sale of all or substantially all
of its business or assets relating to the subject matter of this Agreement, provided that such successor (if the applicable
Party is not the surviving entity in such transaction) agrees in writing to be bound by the terms of this Agreement to the identical
extent applicable to the assigning Party. Any purported assignment in violation of this Section 13.7 shall be void. Any permitted
assignee shall assume all obligations of its assignor under this Agreement.

 

13.8       Counterparts;
Exchange by Facsimile. This Agreement may be executed in two or more counterparts, each of which shall be deemed an original
and that together shall constitute one and the same instrument. Such counterparts may be exchanged by facsimile or PDF (provided
that each executed counterpart is transmitted in one complete transmission or electronic mail message). Where there is an
exchange of executed counterparts by facsimile or PDF, each Party shall be bound by the Agreement notwithstanding that original
copies of the Agreement may not be exchanged immediately. The Parties shall cooperate after execution of the Agreement and exchange
by facsimile or PDF to ensure that each Party obtains an original executed copy of this Agreement with reasonable promptness.

 

13.9       Force
Majeure. No Party shall be liable for failure of or delay in performing obligations set forth in this Agreement, and no Party
shall be deemed in breach of its obligations, if such failure or delay is due to a pandemic, natural disaster, explosion, fire,
flood, tornadoes, thunderstorms, earthquake, war, terrorism, riots, embargo, losses or shortages of power, labor stoppage, substance
or material shortages, damage to or loss of product in transit not due to a failure by such Party or its Affiliates to exercise
reasonable care, events caused by reason of Laws of any Governmental Authority, events caused by acts or omissions of a Third
Party not induced or solicited by such Party or its Affiliates, or any other cause reasonably beyond the control of such Party
or its Affiliates; provided that such Party uses Commercially Reasonable Efforts to overcome the difficulties created by
such force majeure event and to resume performance of its obligations as soon as practicable.

 

    	 	47	 

     

    

 

13.10       Third
Party Beneficiaries. None of the provisions of this Agreement shall be for the benefit of or enforceable by any Third Party
other than a Yuhan Party or a Processa Party, as applicable, that is an Indemnified Party under ARTICLE XI, and no Third Party
shall obtain any right under any provision of this Agreement or shall by reason of any such provision make any claim in respect
of any debt, liability or obligation (or otherwise) against either Party.

 

13.11       Relationship
of the Parties. Each Party shall bear its own costs incurred in the performance of its obligations hereunder without charge
or expense to the other, except as expressly provided in this Agreement. Neither Party shall have any responsibility for the hiring,
termination or compensation of the other Party’s employees or for any employee compensation or benefits of the other Party’s
employees. No employee or representative of a Party shall have any authority to bind or obligate the other Party for any sum or
in any manner whatsoever, or to create or impose any contractual or other liability on the other Party without said other Party’s
approval. For all purposes and notwithstanding any other provision of this Agreement to the contrary, the legal relationship under
this Agreement of each Party to the other Party shall be that of independent contractor. Nothing in this Agreement shall be construed
to establish a relationship of partners or joint venturers between the Parties.

 

13.12       Performance
by Affiliates. To the extent that this Agreement imposes obligations on Affiliates of a Party, such Party agrees to cause
its Affiliates to perform such obligations.

 

13.13       No
Consequential or Punitive Damages. NEITHER PARTY WILL BE LIABLE FOR INDIRECT, INCIDENTAL, CONSEQUENTIAL, SPECIAL, EXEMPLARY,
OR PUNITIVE DAMAGES, INCLUDING LOST PROFITS, ARISING FROM OR RELATING TO THIS AGREEMENT, REGARDLESS OF ANY NOTICE OF SUCH DAMAGES.
NOTHING IN THIS SECTION 13.13 IS INTENDED TO LIMIT OR RESTRICT (A) THE INDEMNIFICATION RIGHTS OR OBLIGATIONS OF EITHER PARTY UNDER
THIS AGREEMENT WITH RESPECT TO THIRD PARTY CLAIMS, OR (B) DAMAGES TO WHICH A PARTY MAY BE ENTITLED FOR BREACH OF CONFIDENTIALITY
AND LIMITATION ON USE OBLIGATIONS SET FORTH IN THIS AGREEMENT, OR (C) DAMAGES TO WHICH A PARTY MAY BE ENTITLED FOR THE WILLFUL
MISCONDUCT, INTENTIONAL BREACH OR FRAUD OF THE OTHER PARTY.

 

[Signature
page follows]

 

    	 	48	 

     

    

 

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

 

	PROCESSA
    PHARMACEUTICALS, INC.	 	YUHAN
    CORPORATION
	 	 	 
	By:
    		 	By:
    	
	Name:	David
    Young	 	Name:	Jung
    Hee Lee
	Title:
    	CEO	 	Title:
    	CEO
    and President

 

Signature
Page to License Agreement

 

    	 	 	 

     

    

 

Schedule
1.10

Compound

 

(S)-N-(1-(2-((4-amino-3-nitrophenyl)amino)-6-propylpyrimidin-4-yl)pyrrolidin-3-yl)acetamide

 

 

    	Schedule 1.10-1

    	 

    

 

Schedule
1.49

Form of Share Issuance Agreement

 

SHARE
ISSUANCE AGREEMENT

 

THIS
SHARE ISSUANCE AGREEMENT (this “Agreement”), is made as of August 19, 2020, by and between Yuhan Corporation
(the “Yuhan”), and Processa Pharmaceuticals, Inc., a Delaware corporation (the “Company”).

 

WHEREAS,
concurrently with the entering into of this Agreement, the Company and Yuhan are entering into that certain License Agreement
(the “License Agreement”);

 

WHEREAS,
pursuant to the terms and subject to the conditions set forth in this Agreement and the License Agreement, the Company desires
to issue to Yuhan, and Yuhan desires to acquire from the Company, at the Closing (as defined below) 250,000 shares (the “Initial
Shares”) of the Company’s common stock (“Common Stock”) as the Upfront Fee (as defined
in the License Agreement);

 

WHEREAS,
pursuant to the terms and subject to the conditions set forth in this Agreement and the License Agreement, the Company will issue
to Yuhan, and Yuhan will acquire from the Company, the Milestone Shares (as defined below) and the Additional Shares (as defined
below);

 

NOW,
THEREFORE, in consideration of the foregoing recitals, the mutual representations, warranties, promises and obligations in the
License Agreement and the following mutual representations, warranties, promises and obligations, and for other good and valuable
consideration, the adequacy and sufficiency of which are hereby acknowledged, Yuhan and the Company agree as follows:

 

1.       Definitions.

 

1.1       Defined
Terms. When used in this Agreement, the following terms shall have the respective meanings specified therefor below:

 

“Affiliate”
has the meaning set forth in the License Agreement.

 

“Agreement”
means as set forth in the Preamble, including all exhibits, schedules and appendices attached hereto.

 

“Beneficially
Own” or “Beneficially Owned”, and words of similar import have the meaning assigned to
such terms pursuant to Rule 13d-3 under the Exchange Act.

 

“Business
Day” has the meaning set forth in the License Agreement.

 

“Common
Stock Equivalents” means any options, warrants or other securities or rights convertible into or exercisable or
exchangeable for, whether directly or following conversion into or exercise or exchange for other options, warrants or other securities
or rights, shares of Common Stock.

 

“Contract”
means, with respect to any Person, any written or oral contracts, agreements, deeds, mortgages, indentures, bonds, loans, leases,
subleases, licenses, sublicense, statements of work, instruments, notes, commitments, commissions, undertakings, arrangements
and understandings to which such Person is a party or by which any of its properties or assets are subject.

 

    	 	Schedule 1.49-1	 

     

    

 

“Development
Milestone Payments” has the meaning set forth in the License Agreement.

 

“Disposition”
or “Dispose of” means (a) pledge, sale, contract to sell, sale of any option or Contract to purchase,
purchase of any option or Contract to sell, grant of any option, right or warrant for the sale of, or other disposition of or
transfer of any shares of Common Stock, or any Common Stock Equivalents, including, without limitation, any “short sale”
or similar arrangement, or (b) swap, hedge, derivative instrument or any other agreement or any transaction that transfers, in
whole or in part, directly or indirectly, the economic consequence of ownership of shares of Common Stock, whether any such swap
or transaction is to be settled by delivery of securities, in cash or otherwise.

 

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

 

“Governmental
Authority” has the meaning set forth in the License Agreement.

 

“IPO
Price” means the price per share at which the Company sells its Common Stock in the Planned Public Offering to the
public.

 

“Last
Round Purchase Price” means the lowest price per share at which the Company sold its capital stock in any transaction(s)
conducted with the principal purpose of raising capital that occurs after the date of this Agreement, pursuant to which the Company
issues and sells shares of its capital stock for immediate cash proceeds. For avoidance of doubt, the Last Round Purchase Price
shall not include shares issued pursuant to an equity compensation plan or in connection with a license or other transaction with
a third party.

 

“Law”
or “Laws” has the meaning set forth in the License Agreement.

 

“Material
Adverse Effect” means a material adverse effect on the business, assets (including intangible assets), liabilities,
financial condition, property or results of operations of the Company.

 

“Material
Contract” means all Contracts that are required to be filed as exhibits by the Company with the SEC pursuant to
Items 601(b)(4) and 601(b)(10) of Regulation S-K promulgated by the SEC.

 

“Milestone
Shares” has the meaning set forth in the License Agreement.

 

“Organizational
Documents” means (a) the Amended and Restated Certificate of Incorporation of the Company, as amended and restated
from time to time and as in effect as of the date of this Agreement, and (b) the Bylaws of the Company as in effect as of the
date of this Agreement.

 

“Party”
means either Yuhan or Processa; “Parties” means both Yuhan and Processa.

 

    	 	Schedule 1.49-2	 

     

    

 

“Permitted
Transferee” means an Affiliate of Yuhan; provided, however, that no such Person shall be deemed a
Permitted Transferee for any purpose under this Agreement unless: (a) the Permitted Transferee, prior to or simultaneously with
any Disposition, shall have agreed in writing to be subject to and bound by all restrictions and obligations set forth in this
Agreement as though it were Yuhan hereunder, and (b) Yuhan acknowledges that it continues to be bound by all restrictions and
obligations set forth in this Agreement.

 

“Person”
has the meaning set forth in the License Agreement.

 

“Planned
Public Offering” has the meaning set forth in the License Agreement.

 

“Prospectus”
means the prospectus (including any preliminary, final or summary prospectus) included in any Registration Statement, all amendments
and supplements to such prospectus and all other material incorporated by reference in such prospectus.

 

“Register,”
“Registered” and “Registration” means a registration effected by preparing
and filing (a) a Registration Statement in compliance with the Securities Act (and any post-effective amendments filed or required
to be filed) and the declaration or ordering of effectiveness of such Registration Statement, or (b) a Prospectus and/or Prospectus
supplement in respect of an appropriate effective Registration Statement.

 

“Registrable
Securities” means the Shares; provided, that any Shares will cease to be Registrable Securities when such
Shares (without regard to any other shares owned) (A) have been sold or otherwise Disposed of or (B) may be sold under Rule 144
without regard to volume restrictions.

 

“Registration
Statement” means a registration statement of the Company that covers the resale of any Registrable Securities pursuant
to the provisions of Appendix 1 filed with, or to be filed with, the SEC under the rules and regulations promulgated under the
Securities Act, including the related Prospectus, amendments and supplements to each such registration statement or Prospectus,
including pre- and post-effective amendments, all exhibits thereto, financial information and all other material incorporated
by reference or deemed to be incorporated by reference in such registration statement.

 

“Rule
144” means Rule 144 under the Securities Act.

 

“Second
Adjustment Target Share Amount” means a number of shares of Common Stock equal to the quotient of $2,000,000 divided
by the lowest of (a) the VWAP Purchase Price, (b) the price per share at which Common Stock is sold in the Late Public Offering,
and (c) the Last Round Purchase Price (if the Company executed a capital raising transaction in addition to the Late Public Offering),
of the period after January 31, 2021 until the Late Public Offering.

 

“Securities
Act” means the Securities Act of 1933, as amended.

 

“Shares”
means the Initial Shares, the Additional Shares, and all Milestone Shares.

 

    	 	Schedule 1.49-3	 

     

    

 

“Shelf
Registration Statement” means a “shelf” registration statement of the Company that covers all Registrable
Securities (when and if issued, but not prior to such issuance) on Form S-3 and under Rule 415 under the Securities Act or, if
the Company is not then eligible to file on Form S-3, on another eligible form under the Securities Act, such as Form S-1, or
any successor rule that may be adopted by the SEC, including without limitation any such registration statement filed pursuant
to Appendix 1 and all amendments and supplements to such “shelf” registration statement, including, post-effective
amendments, in each case, including the Prospectus contained therein, all exhibits thereto and any document incorporated by reference
therein.

 

“Subsidiary”
means any corporation, association trust, limited liability company, partnership, joint venture or other business association
or entity (a) at least 50% of the outstanding voting securities of which are at the time owned or controlled directly or indirectly
by the Company or (b) with respect to which the Company possesses, directly or indirectly, the power to direct or cause the direction
of the affairs or management of such Person.

 

“Target
Share Amount” means (i) if the Planned Public Offering has been consummated, a number of shares of Common Stock
equal to the quotient of $2,000,000 divided by the IPO Price; provided, however, that the Target Share Amount shall
be no less than 181,818 and (ii) if the Planned Public Offering has not been consummated, a number of shares of Common Stock equal
to the quotient of $2,000,000 divided by the lowest of (a) the VWAP Purchase Price, (b) the Last Round Purchase Price as of January
31, 2021 (if the Company has executed a capital raising transaction), and (c) $8.00.

 

“Tax”
or “Taxes” shall mean all federal, state, local, and foreign income, excise, gross receipts, gross income,
ad valorem, profits, gains, property, capital, sales, transfer, use, payroll, employment, severance, withholding, duties, intangibles,
franchise, backup withholding, value-added, and other taxes imposed by a Governmental Authority, together with all interest, penalties
and additions to tax imposed with respect thereto.

 

“Third
Party” means any Person other than Yuhan, the Company, or any Affiliate of Yuhan or the Company.

 

“Trading
Market” means the following markets or exchanges on which the Common Stock is listed or quoted for trading on the
date in question: the Nasdaq Capital Market, the Nasdaq Global Market, the Nasdaq Global Select Market, the New York Stock Exchange
or the NYSE MKT, or, prior to consummation of the Planned Public Offering, the OTCQB® Market.

 

“Transactions”
means the issuance of the Shares by the Company, and the acquisition of the Shares by Yuhan, in accordance with the terms hereof,
and any other transactions contemplated by this Agreement and the License Agreement.

 

“Transaction
Agreements” means this Agreement and the License Agreement.

 

“Underwriter”
means, with respect any Underwritten Offering, a securities dealer(s) who purchases any Registrable Securities as a principal
in connection with a distribution of such Registrable Securities.

 

“Underwritten
Offering” means a public offering of securities Registered under the Securities Act in which an Underwriter participates
in the distribution of such securities, including on a firm commitment basis for reoffer and resale to the public, including any
such offering that is a “bought deal” or a block trade.

 

    	 	Schedule 1.49-4	 

     

    

 

“VWAP
Purchase Price” means the volume-weighted average price of a share of Common Stock (weighted by the total daily
trading volume for that day, as quoted on the electronic financial news service of Bloomberg L.P. or, if such quote is not then
available, then on the electronic financial news service of Thomson Reuters) on the Trading Market over the most recent 45 days
in which at least one share of Common Stock was traded.

 

2.       Purchase
and Sale of Common Stock. Subject to the terms and conditions of this Agreement and the License Agreement, at the Closing,
the Company shall issue to Yuhan and Yuhan shall acquire from the Company the Initial Shares.

 

3.       Closing
Date; Deliveries.

 

3.1       Closing
Date. The closing of the acquisition and issuance of the Initial Shares hereunder (the “Closing”)
shall be held by electronic exchange of signature pages on the date within ten (10) Business Days following the effective date
of the License Agreement or at such other time and date as the Parties may mutually agree in writing. The date the Closing occurs
is hereinafter referred to as the “Closing Date.”

 

3.2       Deliveries.
At the Closing, the Company shall deliver or cause to be delivered to Yuhan the Initial Shares in certificated form or maintained
in restricted book-entry form at the Company’s transfer agent (at Yuhan’s cost). At any time Additional Shares or
Milestone Shares are to be delivered pursuant to this Agreement, the Company shall deliver or cause to be delivered to Yuhan such
Shares certificated form or maintained in restricted book-entry form at the Company’s transfer agent (at Yuhan’s cost).

 

4.       Adjustments.

 

4.1       Forfeiture
of Initial Shares. In the event the Company consummates the Planned Public Offering at an IPO Price greater than $8.00, a
number of Initial Shares equal to 250,000 minus the Target Share Amount shall be automatically forfeited. In the event of such
forfeiture, Yuhan agrees to work in good faith with the Company to take any actions reasonably necessary to effect and document
such forfeiture.

 

4.2       Issuance
of Additional Shares on or before January 31, 2021. In the event the Company consummates the Planned Public Offering at an
IPO Price less than $8.00, or if the Company does not consummate the Planned Public Offering on or before January 31, 2021, the
Company shall, for no additional consideration, immediately issue a number of shares of Common Stock to Yuhan equal to the Target
Share Amount minus 250,000.

 

4.3       Issuance
of Additional Shares after January 31, 2021. In the event the Company does not consummate the Planned Public Offering on or
before January 31, 2021, but consummates a capital raise for the up-list to Nasdaq or the NYSE pursuant to the sale of shares
pursuant to the Form S-1 registration statement (the “Late Public Offering”) after January 31, 2021,
the Company shall, for no additional consideration, immediately issue a number of shares of Common Stock to Yuhan equal to the
Second Adjustment Target Share Amount minus the number of shares issued pursuant to Section 4.2 (if any) minus 250,000 (any shares
of Common Stock issued pursuant to Section 4.2 or this Section 4.3, the “Additional Shares”).

 

    	 	Schedule 1.49-5	 

     

    

 

5.       Milestone
Shares. The Company shall issue Milestone Shares to Yuhan on each date that a Development Milestone Payment is due pursuant
to the License Agreement. If the Planned Public Offering has been consummated, the number of Milestone Shares shall be equal to
the dollar amount set forth in the License Agreement applicable to the Development Milestone achieved divided by the VWAP Purchase
Price as calculated on the date the Development Milestone Payment is due. If the Planned Public Offering has not been consummated,
the number of Milestone Shares shall be equal to the dollar amount set forth in the License Agreement applicable to the Development
Milestone achieved divided by the lesser of (i) the VWAP Purchase Price as calculated on the date the Development Milestone Payment
is due and (ii) the Last Round Purchase Price (if applicable) as of the date the Development Milestone Payment is due.

 

6.       Representations
and Warranties of the Company. The Company hereby represents and warrants to Yuhan that the following representations are
true and complete as of the date hereof and as of the Closing, except as otherwise indicated herein or in a SEC Report (as defined
below):

 

6.1       Organization.
The Company is a corporation duly organized, validly existing and in good standing under the laws of the State of Delaware. The
Company has all requisite corporate power and authority to enter into this Agreement, to issue the Shares and to perform its obligations
under and to carry out the Transactions contemplated by this Agreement. The Company is duly qualified as a foreign corporation
to transact business and is in good standing in each jurisdiction in which such qualification is required, whether by reason of
the ownership or leasing of property or the conduct of business, except whether the failure to so qualify or be in good standing
would not, individually or in the aggregate, constitute a Material Adverse Effect. The Company is not in violation of, in conflict
with, or in default under its Organizational Documents in any material respect. True and correct copies of the Organizational
Documents, as in effect on the date of this Agreement, are attached as exhibits to the Company’s SEC Reports.

 

6.2       Authorization.

 

(a)       All
requisite corporate action on the part of the Company required by applicable Law for the authorization, execution and delivery
by the Company of this Agreement and the performance of all obligations of the Company hereunder and thereunder, including the
authorization, issuance and delivery of the Shares, has been taken.

 

(b)       This
Agreement has been duly executed and delivered by the Company, and upon the due execution and delivery of this Agreement by Yuhan,
it will constitute valid and legally binding obligations of the Company, enforceable against the Company in accordance with its
terms, except as limited by: (i) applicable bankruptcy, insolvency, reorganization, moratorium, fraudulent conveyance and other
Laws of general application relating to or affecting enforcement of creditors’ rights generally; and (ii) as limited by
Laws relating to the availability of specific performance, injunctive relief or other equitable remedies (the exceptions set forth
in (i) and (ii), the “Enforceability Exceptions”).

 

    	 	Schedule 1.49-6	 

     

    

 

(c)       On
or prior to the date hereof, the Board of Directors of the Company has duly adopted resolutions, among other things, authorizing
and approving each of the Transaction Agreements and the Transactions.

 

6.3       No
Conflicts. Except as set forth in a written notice provided by the Company to Yuhan prior to the execution of this Agreement
and referencing this Section 6.3, the execution, delivery and performance of this Agreement, and compliance with the provisions
hereof, and the issuance of the Shares by the Company do not and shall not: (a) subject to receipt of the Required Approvals,
violate any provision of applicable Law or any ruling, writ, injunction, order, permit, judgment or decree of any Governmental
Authority to which the Company is subject, (b) result in any encumbrance upon any of the Shares, other than restrictions on resale
pursuant to securities laws or as set forth in this Agreement, (c) result in a default, modification, acceleration of payment
or termination under, give any Person a right of termination or cancellation under, result in the loss of a benefit or imposition
of any obligation under, any Material Contract, or (d) violate or conflict with any of the provisions of the Organizational Documents,
except, in the case of subsections (a) and (c) as would not, individually or in the aggregate, constitute a Material Adverse Effect.

 

6.4       No
Approval. No consent, approval, authorization or other order of, or filing with, or notice to, any Governmental Authority
is required to be obtained or made by the Company or any of its Subsidiaries in connection with the authorization, execution and
delivery by the Company of this Agreement or with the authorization, issuance and sale by the Company of the Shares, or the consummation
of the Transactions, except (a) such filings as may be required to be made with the Securities and Exchange Commission (the “SEC”)
and with any state blue sky or securities regulatory authority, which filings shall be made in a timely manner in accordance with
all applicable Laws; and (b) those that have been made or obtained prior to the date of this Agreement (the items referred to
in clauses (a) and (b), the “Required Approvals”).

 

6.5       Valid
Issuance of Shares. When issued, sold and delivered in accordance with the terms hereof, the Shares will be duly authorized,
validly issued, fully paid and nonassessable, free from any liens, encumbrances or restrictions on transfer, including preemptive
rights, rights of first refusal, purchase option, call option, subscription right or other similar rights, other than as arising
pursuant to this Agreement, as a result of any action by Yuhan or under federal or state securities Laws. Assuming the accuracy
of the representations and warranties of Yuhan in this Agreement and subject to the Required Approvals, the Shares will be issued
in compliance with all applicable federal and state securities Laws.

 

6.6       Company
SEC Reports.

 

(a)       The
Company has filed or furnished, as applicable, all reports, schedules, forms, statements and other documents required to be filed
or furnished by it with the SEC pursuant to the reporting requirements of the Exchange Act (all of the foregoing filed prior to
the date of this Agreement and all exhibits included therein and financial statements and schedules thereto and documents (other
than exhibits) incorporated by reference therein, collectively, the “Company SEC Reports”), each of
which complied at the time of filing in all material respects with all applicable requirements of the Securities Act and the Exchange
Act, as applicable, in each case as in effect on the dates such forms reports and documents were filed. As of its respective date,
and if amended, as of the date of the last such amendment, no Company SEC Report, when filed, contained any untrue statement of
a material fact or omitted to state a material fact required to be stated therein or necessary in order to make the statements
therein, in light of the circumstances under which they were made, not misleading. All Material Contracts to which the Company
or any Subsidiary is a party, or to which the property or assets of the Company or any Subsidiary are subject, that are required
to be included as part of or specifically identified in the Company SEC Reports, are so included or specifically identified. True
and complete copies of the Company SEC Reports are available for public access via the SEC’s EDGAR system (excluding schedules,
exhibits and any redacted information).

 

    	 	Schedule 1.49-7	 

     

    

 

(b)       As
of their respective dates, the consolidated financial statements included or incorporated in the Company SEC Reports (the “Financial
Statements”), and the related notes, complied as to form in all material respects with applicable accounting requirements
and the published rules and regulations of the SEC with respect thereto. The Financial Statements and the related notes have been
prepared, in all material respects, in accordance with accounting principles generally accepted in the United States, consistently
applied, during the periods involved (except (i) as may be otherwise indicated in the Financial Statements or the notes thereto,
or (ii) in the case of unaudited interim statements, to the extent they may not include footnotes, may be condensed or summary
statements or may conform to the SEC’s rules and instructions for Quarterly Reports on Form 10-Q) and fairly present in
all material respects the consolidated financial position and the results of the operations of the Company and its Subsidiaries,
retained earnings (loss), and cash flows, as the case may be, for the periods then ended (subject, in the case of unaudited statements,
to normal and recurring year-end audit adjustments).

 

(c)       Except
as noted in the SEC Reports, the Company has established and maintains disclosure controls and procedures (as defined in Rules
13a-15 and 15d-15 under the Exchange Act) that (i) are designed to ensure that material information relating to the Company, including
each consolidated Subsidiary, is made known to the Company’s principal executive officer and its principal financial officer
by others within those entities, particularly during the periods in which the periodic reports required under the Exchange Act
are being prepared; and (ii) have been evaluated by management of the Company for effectiveness as of the end of the Company’s
most recent fiscal quarter.

 

7.       Representations
and Warranties of Yuhan. Yuhan hereby represents and warrants to the Company as of the date hereof as follows:

 

7.1       Organization.
Yuhan is a corporation duly organized, validly existing and in good standing under the laws of the Republic of Korea. Yuhan has
all requisite power and authority to enter into this Agreement, to purchase the Shares and to perform its obligations under and
to carry out the Transactions.

 

7.2       Authorization.
All requisite corporate action on the part of Yuhan, required by applicable Law for the authorization, execution and delivery
by Yuhan of this Agreement and the performance of all of its obligations hereunder, including the acquisition of the Shares, has
been taken. This Agreement has been duly executed and delivered by Yuhan, and upon the due execution and delivery thereof by the
Company, will constitute valid and legally binding obligations of Yuhan, enforceable against Yuhan in accordance with its terms,
except as limited by the Enforceability Exceptions.

 

    	 	Schedule 1.49-8	 

     

    

 

7.3       No
Conflicts. The execution, delivery and performance of this Agreement and compliance with the provisions thereof, by Yuhan
do not and shall not: (a) violate any provision of applicable Law or any ruling, writ, injunction, order, permit, judgment or
decree of any Governmental Authority, or (b) violate or conflict with any of the provisions of Yuhan’s organizational documents
(including any articles or memoranda of organization or association, charter, by-laws or similar documents), except as would not
materially impair or affect in a material adverse manner the ability of Yuhan to consummate the Transactions and perform its obligations
under this Agreement.

 

7.4       No
Approval. No consent, approval, authorization or other order of any Governmental Authority is required to be obtained by Yuhan
in connection with the authorization, execution and delivery of any of this Agreement or with the subscription for and purchase
of the Shares.

 

7.5       Acquisition
Entirely for Own Account. The Shares shall be acquired for investment for Yuhan’s own account, not as a nominee or agent,
and not with a view to the resale or distribution of any part thereof, and as of the date hereof, Yuhan has no present intention
of selling, granting any participation or otherwise distributing the Shares. Yuhan, either alone or together with its representatives,
has such knowledge, sophistication and experience in business and financial matters so as to be capable of evaluating the merits
and risks of the prospective investment in the Shares, and has so evaluated the merits and risks of such investment. Yuhan is
able to bear the economic risk of an investment in the Shares and, at the present time, is able to afford a complete loss of such
investment.

 

7.6       Purchaser
Status. Yuhan is as of the date hereof, and as of the date any Shares are issued under this Agreement will be, an “accredited
investor” as defined in Rule 501 under the Securities Act.

 

7.7       Access
to Information. Yuhan acknowledges that it has had the opportunity to review the Transaction Agreements and the SEC Reports
and has been afforded, (i) the opportunity to ask such questions as it has deemed necessary of, and to receive answers from, representatives
of the Company concerning the terms and conditions of the offering of the Shares and the merits and risks of investing in the
Shares; (ii) access to information about the Company and its financial condition, results of operations, business, properties,
management and prospects sufficient to enable it to evaluate its investment; and (iii) the opportunity to obtain such additional
information that the Company possesses or can acquire without unreasonable effort or expense that is necessary to make an informed
investment decision with respect to the investment.

 

7.8       Restricted
Securities. Yuhan understands that the Shares, when issued, will be “restricted securities” under the federal
securities Laws inasmuch as they are being acquired from the Company in a transaction not involving a public offering and that
under such Laws the Shares may be resold without registration under the Securities Act only in certain limited circumstances.
Yuhan represents that it is familiar with Rule 144.

 

    	 	Schedule 1.49-9	 

     

    

 

7.9       Legends.
In addition to any other legend required by Law, the book-entry or certificated form of the Shares shall bear any legend required
by the “blue sky” laws of any state and a restrictive legend in substantially the following form:

 

THESE
SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED. THEY MAY NOT BE SOLD, OFFERED FOR SALE, PLEDGED
OR HYPOTHECATED IN THE ABSENCE OF A REGISTRATION STATEMENT IN EFFECT WITH RESPECT TO THE SECURITIES UNDER SUCH ACT OR AN OPINION
OF COUNSEL SATISFACTORY TO THE ISSUER THAT SUCH REGISTRATION IS NOT REQUIRED OR UNLESS SOLD PURSUANT TO RULE 144 OF SUCH ACT.

 

7.10       Acquiring
Person. As of the date of this Agreement and immediately prior to the Closing, neither Yuhan nor any of its controlled Affiliates
(excluding directors and officers of Yuhan who may hold securities of the Company for their personal account) Beneficially Owns,
or will Beneficially Own any securities of the Company.

 

7.11       No
General Solicitation. Yuhan is not acquiring the Shares as a result of (a) any advertisement, article, notice or other communication
published in any newspaper, magazine or similar media or broadcast over television, radio or the Internet, in each case, relating
to the Company, or (ii) any seminar or meeting whose attendees, including Yuhan, have been invited by any general solicitation
or general advertising related to the Company.

 

8.       Covenants.

 

8.1       Commercially
Reasonable Best Efforts. Subject to the terms and conditions set forth in this Agreement, each Party hereto shall use its
commercially reasonable best efforts to do or cause to be done all things necessary or appropriate to satisfy the conditions to
the Closing and to consummate the Transactions as promptly as practicable. Without limiting the generality of the foregoing, unless
the License Agreement is earlier terminated by either Party in accordance with its terms, the Company and Yuhan shall use their
respective commercially reasonable best efforts to cause the Closing to occur. Each of the Company and Yuhan shall not, and shall
not permit any of their respective Affiliates to, take any action that would, or that would reasonably be expected to, result
in any of the conditions set forth in Section 9 or Section 10 not being satisfied.

 

8.2       Registration
Rights. The Company hereby provides Yuhan with the registration rights set forth on Appendix 1 attached hereto, which
is hereby incorporated in and made a part of this Agreement as if set forth in full herein.

 

8.3       Participation
Rights. The Company shall, in connection with the Planned Public Offering, reserve and offer (and cause the Underwriters to
reserve and offer) to Yuhan or an Affiliate designated by Yuhan, at least a number of shares of Common Stock having a value at
the IPO Price of at least $3,000,000.

 

    	 	Schedule 1.49-10	 

     

    

 

8.4       Facilitation
of Sales Pursuant to Rule 144. For as long as Yuhan or its Affiliates Beneficially Owns any Shares, to the extent it shall
be required to do so under the Exchange Act, the Company shall use commercially reasonable efforts to timely file the reports
required to be filed by it under the Exchange Act or the Securities Act (including the reports under Sections 13 and 15(d) of
the Exchange Act referred to in subparagraph (c)(1) of Rule 144), and shall use commercially reasonable efforts to take such further
necessary action as Yuhan may reasonably request in connection with the removal of any restrictive legend on the Shares being
sold at Yuhan’s cost, all to the extent required from time to time to enable such holder to sell the Shares without registration
under the Securities Act within the limitations of the exemption provided by Rule 144. Notwithstanding the foregoing, the Company
shall not have any obligations pursuant to this section during any time when a Registration Statement covering the Shares is effective.

 

9.       Conditions
to the Company’s Obligations. The obligations of the Company under Section 2 hereof are subject to the fulfillment
prior to or on the Closing Date (and with respect to Section 9.1, as of each date the Company is required to issue Shares to Yuhan
under this Agreement) of all of the following conditions, any of which may be waived in whole or in part by the Company.

 

9.1       Representations
and Warranties. The representations and warranties of Yuhan contained in this Agreement and in any certificate, if any, or
other writing, if any, delivered by Yuhan pursuant hereto shall be true and correct in all material respects on and as of the
Closing Date, and as of each date the Company is required to issue Shares under this Agreement, except those representations and
warranties qualified by materiality or Material Adverse Effect, which representations and warranties shall be true and correct
in all respects, with the same effect as though such representations and warranties had been made on and as of the Closing Date
or a Share issuance date, as applicable (except to the extent expressly made as of an earlier date, in which case as of such earlier
date).

 

9.2       Performance.
Yuhan shall have performed and complied in all material respects with all agreements, obligations and conditions contained in
this Agreement that are required to be performed or complied with it on or before the Closing.

 

9.3       License
Agreement. Each of the Company and Yuhan shall have executed and delivered the License Agreement, and the License Agreement
shall not have been terminated and shall be effective in accordance with its terms.

 

10.       Conditions
to Yuhan’s Obligations. The obligations of Yuhan under Section 2 hereof are subject to the fulfillment prior
to or on the Closing Date of all of the following conditions, any of which may be waived in whole or in part by Yuhan.

 

10.1       Representations
and Warranties. The representations and warranties of the Company contained in this Agreement and in any certificate, if any,
or other writing, if any, delivered by the Company pursuant hereto shall be true and correct in all material respects on and as
of the Closing Date, except those representations and warranties qualified by materiality or Material Adverse Effect, which representations
and warranties shall be true and correct in all respects, with the same effect as though such representations and warranties had
been made on and as of the Closing Date (except to the extent expressly made as of an earlier date, in which case as of such earlier
date).

 

    	 	Schedule 1.49-11	 

     

    

 

10.2       Performance.
The Company shall have performed and complied in all material respects with all agreements, obligations and conditions contained
in this Agreement that are required to be performed or complied with it on or before the Closing.

 

10.3       License
Agreement. Each of the Company and Yuhan shall have executed and delivered the License Agreement, and the License Agreement
shall not have been terminated and shall be effective in accordance with its terms.

 

10.4       No
Stockholder Approval Required. No approval on the part of the stockholders of the Company shall be required in connection
with the execution and delivery by the Company of this Agreement and the consummation of the Transactions.

 

10.5       Qualification
Under State Securities Laws. All registrations, qualifications, permits and approvals, if any, required to be obtained prior
to the Closing under applicable state securities laws shall have been obtained for the lawful execution, delivery and performance
of this Agreement or the other Transaction Agreements, including, without limitation, the offer and sale of the Shares.

 

10.6       Absence
of Litigation. No proceeding challenging the Transaction Agreements or the Transactions, or seeking to prohibit, alter, prevent
or materially delay the Closing, shall have been instituted by any Governmental Authority.

 

11.       Survival.
The representations and warranties contained in this Agreement shall survive the Closing of the Transactions until the date that
is two years following the date of this Agreement. The covenants and agreements contained in this Agreement shall survive Closing
of the Transactions. The rights and remedies that may be exercised by Yuhan shall not be limited or otherwise affected by or as
a result of any information furnished to, or any investigation made by or knowledge of, Yuhan or its representatives.

 

12.       Miscellaneous.

 

12.1       Governing
Law; Submission to Jurisdiction. This Agreement shall be governed by and interpreted in accordance with the laws of the state
of New York, without regard to its conflicts of laws rules. Each Party (a) irrevocably submits to the exclusive jurisdiction in
the state court sitting in New York (collectively, the “Courts”), for purposes of any action, suit or other
proceeding arising out of this Agreement, and (b) agrees not to raise any objection at any time to the laying or maintaining of
the venue of any such action, suit or proceeding in any of the Courts, irrevocably waives any claim that such action, suit or
other proceeding has been brought in an inconvenient forum and further irrevocably waives the right to object, with respect to
such action, suit or other proceeding, that such Court does not have any jurisdiction over such Party. Either Party may serve
any process required by such Courts by way of notice under this Agreement. Notwithstanding anything to the contrary in this Section
12.1, each Party shall have the right to institute judicial proceedings against the other Party or anyone acting by, through,
or under such other Party, in any court of competent jurisdiction, in order to enforce the instituting Party’s rights hereunder
through reformation of contract, specific performance, injunction, or similar equitable relief.

 

    	 	Schedule 1.49-12	 

     

    

 

12.2       No
Waiver, Modifications. It is agreed that no waiver by a Party hereto of any breach or default of any of the covenants or agreements
set forth herein shall be deemed a waiver as to any subsequent or similar breach or default. The failure of either Party to insist
on the performance of any obligation hereunder shall not be deemed a waiver of any such obligation. No amendment, modification,
waiver, release or discharge to this Agreement shall be binding upon the Parties unless in writing and duly executed by authorized
representatives of both Parties.

 

12.3       Notices.
All notices, instructions and other communications hereunder or in connection herewith shall be in writing, shall be sent to the
address specified in this Section 12.3 and shall be: (a) delivered personally; (b) sent by registered or certified mail,
return receipt requested, postage prepaid; (c) sent via a reputable nationwide overnight courier service; or (d) sent by facsimile
or other electronic transmission. Any such notice, instruction or communication shall be deemed to have been delivered upon receipt
if delivered by hand, three (3) Business Days after it is sent by registered or certified mail, return receipt requested, postage
prepaid, one (1) Business Day after it is sent via a reputable nationwide overnight courier service, or when transmitted with
confirmation of receipt, if transmitted by facsimile or other electronic transmission (if such transmission is on a Business Day;
otherwise, on the next Business Day following such transmission).

 

Notices
to the Company shall be addressed to:

 

Processa
Pharmaceuticals, Inc.

7380
Coca Cola Drive, Suite 106

Hanover,
MD 21076

Attn:
Wendy Guy, Chief Administrative Officer

Email:
wguy@processapharmaceuticals.com

 

Notices
to Yuhan shall be addressed to:

 

Yuhan
Corporation

74,
Noryangjin-ro, Dongjak-gu

Seoul,
Republic of Korea, 06927

Attention:
Taejin Yoon, Head of Global Business Development

Email:
tyoon@yuhan.co.kr

Facsimile:
82-2-828-0086

 

Yuhan
Corporation

74,
Noryangjin-ro, Dongjak-gu

Seoul,
Republic of Korea, 06927

Attention:
Ryan Ryou, Global Operations

Email:
ryan@yuhan.co.kr

Facsimile:
82-2-828-0086

 

Either
Party may change its address by giving notice to the other Party in the manner provided above.

 

12.4       Entire
Agreement. This Agreement (including all exhibits, schedules and annexes attached hereto) and the License Agreement contain
the entire agreement among the Parties with respect to the subject matter hereof and thereof and supersede all prior and contemporaneous
arrangements or understandings, whether written or oral, with respect hereto and thereto.

 

    	 	Schedule 1.49-13	 

     

    

 

12.5       Headings;
Nouns and Pronouns; Section References. Headings in this Agreement are for convenience of reference only and shall not be
considered in construing this Agreement. Whenever the context may require, any pronouns used herein shall include the corresponding
masculine, feminine or neuter forms, and the singular form of names and pronouns shall include the plural and vice-versa. References
in this Agreement to a section or subsection shall be deemed to refer to a section or subsection of this Agreement unless otherwise
expressly stated.

 

12.6       Severability.
If any provision of this Agreement is held to be illegal, invalid or unenforceable under any present or future Law, (a) such provision
shall be fully severable, (b) this Agreement shall be construed and enforced as if such illegal, invalid or unenforceable provision
had never comprised a part hereof, (c) the remaining provisions of this Agreement shall remain in full force and effect and shall
not be affected by the illegal, invalid or unenforceable provision or by its severance herefrom, and (d) in lieu of such illegal,
invalid or unenforceable provision, the Parties shall negotiate in good faith a substitute legal, valid and enforceable provision
as similar in terms to such illegal, invalid or unenforceable provision as possible and as reasonably acceptable to the Parties.

 

12.7       Assignment.
Except for an assignment by Yuhan of this Agreement or any rights hereunder to an Affiliate or Permitted Transferee (which assignment
will not relieve Yuhan of any obligation hereunder), neither this Agreement nor any of the rights or obligations hereunder may
be assigned by either Yuhan or the Company without (a) the prior written consent of Company in the case of any assignment by Yuhan
or (b) the prior written consent of Yuhan in the case of an assignment by the Company.

 

12.8       Successors
and Assigns. This Agreement shall be binding upon and inure to the benefit of the Parties hereto and their respective successors
and permitted assigns.

 

12.9       Counterparts.
This Agreement may be executed in counterparts, each of which shall be deemed an original but which together shall constitute
one and the same instrument. In the event that any signature is delivered by facsimile transmission or by an e-mail which contains
a portable document format (.pdf) file of an executed signature page, such executed signature page shall create a valid and binding
obligation of the Party executing it (or on whose behalf such signature page is executed) with the same force and effect as if
such executed signature page were an original thereof.

 

12.10       Third
Party Beneficiaries. None of the provisions of this Agreement shall be for the benefit of or enforceable by any Third Party,
including any creditor of any Party hereto, except that each Affiliate of Yuhan is an express third party beneficiary entitled
to enforce this Agreement directly against the Company. No Third Party shall obtain any right under any provision of this Agreement
or shall by reason of any such provision make any claim in respect of any debt, liability or obligation (or otherwise) against
any Party hereto.

 

    	 	Schedule 1.49-14	 

     

    

 

12.11       No
Strict Construction. This Agreement has been prepared jointly and will not be construed against either Party. No presumption
as to construction of this Agreement shall apply against either Party with respect to any ambiguity in the wording of any provision(s)
of this Agreement irrespective of which Party may be deemed to have authored the ambiguous provision(s).

 

12.12       Remedies.
The rights, powers and remedies of the Parties under this Agreement are cumulative and not exclusive of any other right, power
or remedy which such Parties may have under any other Contract or Law. No single or partial assertion or exercise of any right,
power or remedy of a Party hereunder shall preclude any other or further assertion or exercise thereof. The Parties hereby acknowledge
and agree that the rights of the Parties hereunder are special, unique and of extraordinary character, and that if any Party refuses
or otherwise fails to act, or to cause its Affiliates to act, in accordance with the provisions of this Agreement, such refusal
or failure would result in irreparable injury to the Company or Yuhan as the case may be, the exact amount of which would be difficult
to ascertain or estimate and the remedies at law for which would not be reasonable or adequate compensation. Accordingly, if any
Party refuses or otherwise fails to act, or to cause its Affiliates to act, in accordance with the provisions of this Agreement,
then, in addition to any other remedy which may be available to any damaged Party at law or in equity, such damaged Party will
be entitled to seek specific performance and injunctive relief, without posting bond or other security, and without the necessity
of proving actual or threatened damages, which remedy such damaged Party will be entitled to seek in any court of competent jurisdiction.

 

12.13       Expenses.
Each Party shall pay its own fees and expenses in connection with the preparation, negotiation, execution, delivery and performance
of the Transaction Agreements.

 

12.14       WAIVER
OF JURY TRIAL. IN ANY ACTION, SUIT, OR PROCEEDING IN ANY JURISDICTION BROUGHT BY ANY PARTY AGAINST ANY OTHER PARTY, THE PARTIES
EACH KNOWINGLY AND INTENTIONALLY, TO THE GREATEST EXTENT PERMITTED BY APPLICABLE LAW, HEREBY ABSOLUTELY, UNCONDITIONALLY, IRREVOCABLY
AND EXPRESSLY WAIVES FOREVER TRIAL BY JURY.

 

12.15       Equitable
Adjustments. The number of Shares issuable pursuant to this Agreement shall be adjusted equitably in the event of any stock
split, dividend, corporate reorganization or similar transaction.

 

[Signature
Page Follows]

 

    	 	Schedule 1.49-15	 

     

    

 

IN
WITNESS WHEREOF, the Parties have executed and delivered this Agreement as of the date first above written.

 

	 	Processa
    Pharmaceuticals, Inc.
	 	 
	 	By:	
	 	Name:	David
    Young
	 	Title:	CEO
	 	 	 
	 	Yuhan
    Corporation
	 	 	 
	 	By:	
	 	Name:	Jung
    Hee Lee
	 	Title:	CEO
    and President

 

Signature
Page to Share Issuance Agreement

 

    	 	 	 

     

    

 

Appendix
1

 

Registration
Rights

 

1.       Resale
Registration.

 

1.1       At
any time following the date that is 180 days after the Planned Public Offering, upon Yuhan’s written request following the
issuance of the Initial Shares, the Additional Shares, or the Milestone Shares, as applicable, the Company will file a Shelf Registration
Statement registering for resale the Registrable Securities under the Securities Act. The Company shall use its commercially reasonable
efforts to cause such Shelf Registration Statement to become effective as promptly as practicable after filing. Until the earlier
of such time as (i) all Registrable Securities included in such Shelf Registration Statement cease to be Registrable Securities
or (ii) the Company is no longer eligible to maintain a Shelf Registration Statement, the Company will keep current and effective
such Shelf Registration Statement and file such supplements or amendments to such Shelf Registration Statement (or file a new
Shelf Registration Statement when such preceding Shelf Registration Statement expires pursuant to the rules of the SEC) as may
be necessary or appropriate in order to keep such Shelf Registration Statement continuously effective and useable for the resale
of Registrable Securities under the Securities Act. For avoidance of doubt, this requirement to register the shares shall not
require the Company to file a registration statement for Yuhan to sell its share in an underwritten offering.

 

1.2       If
the filing, initial effectiveness or continued use of the Shelf Registration Statement at any time would require the Company to
make a public disclosure of material non-public information that the Company has a bona fide business purpose for not disclosing
publicly at such time, the Company may, upon giving prompt written notice of such action to Yuhan, delay the filing or initial
effectiveness of, or suspend use of, the Shelf Registration Statement (a “Suspension”); provided,
however, that the Company shall not be permitted to exercise a Suspension more than once during any twelve (12) month period
for a period not to exceed sixty (60) days. In the case of a Suspension, Yuhan agrees to suspend use of the applicable Prospectus
in connection with any sale or purchase, or offer to sell or purchase, Shares, upon receipt of the notice referred to above. The
Company shall immediately notify Yuhan in writing upon the termination of any Suspension, amend or supplement the Prospectus,
if necessary, so it does not contain any untrue statement or omission and furnish to Yuhan such numbers of copies of the Prospectus
as so amended or supplemented as Yuhan may reasonably request. The Company shall, if necessary, supplement or amend the Shelf
Registration Statement, if required by law or as may reasonably be requested by Yuhan.

 

2.       Information.
The Company may require Yuhan to furnish to the Company such information regarding the distribution of the Shares and such other
information relating to Yuhan and its ownership of Shares as the Company may from time to time reasonably request in writing to
the extent that such information is required to be included in the Shelf Registration Statement.

 

    	i

     

    

 

3.       Expenses.
All expenses incident to the registration of the Shares shall be paid by the Company, including (a) all registration and filing
fees, and any other fees and expenses associated with filings required to be made with the SEC or Financial Industry Regulatory
Authority, (b) all fees and expenses in connection with compliance with any securities or “Blue Sky” laws, (c) all
fees and disbursements of counsel for the Company and of all independent certified public accountants or independent auditors
of the Company and any of its Subsidiaries (including the expenses of any special audit and comfort letters required by or incident
to such performance), (d) Securities Act liability insurance or similar insurance if the Company so desires, (e) all fees and
expenses incurred in connection with the listing of the Shares on any securities exchange or quotation of the Shares on any inter-dealer
quotation system, (f) all fees and expenses of any special experts or other Persons retained by the Company in connection with
any registration, and (g) all of the Company’s internal expenses (including all salaries and expenses of its officers and
employees performing legal or accounting duties). For the avoidance of doubt, the Company shall not be required to register the
Shares for an underwritten public offering by Yuhan and will not be responsible for any underwriting discounts and commissions
and transfer Taxes, if any, attributable to the sale of the Shares.

 

4.       Notice.
The Company shall notify Yuhan immediately upon (a) any request by the SEC or any other Federal or state Governmental Authority
for amendments or supplements to a Shelf Registration Statement or for additional information that pertains to Yuhan as a selling
stockholder; (b) the issuance by the SEC of any stop order suspending the effectiveness of the Shelf Registration Statement
or any order by the SEC or any other regulatory authority preventing or suspending the use of any Prospectus or the initiation
or threatening of any proceedings for such purposes, (c) receipt by the Company of any notification with respect to the suspension
of the qualification of the Shares for offering or sale in any jurisdiction or the initiation or threatening of any proceeding
for such purpose, or (d) the Company becoming aware that the Shelf Registration Statement or the related Prospectus contains any
untrue statement of a material fact or omits to state a material fact necessary to make the statements therein (in the case of
such Prospectus, in light of the circumstances under which they were made) not misleading.

 

5.       Indemnification.

 

5.1       To
the extent permitted by Law, the Company will indemnify and hold harmless Yuhan, its officers, directors, agents, partners, members,
stockholders and employees, as applicable, and each Person who controls Yuhan (within the meaning of the Securities Act or the
Exchange Act), and the officers, directors, agents, partners, members, stockholders and employees of each such controlling Person,
from and against any and all losses, claims, liabilities, damages, deficiencies, assessments, fines, judgments, fees, costs (including,
without limitation, reasonable costs of preparation and reasonable attorneys’ fees) and expenses (collectively “Losses”)
(joint or several), as incurred, to which they may become subject under the Securities Act, the Exchange Act or other federal
or state law, insofar as such Losses (or actions in respect thereof) arise out of, relate to, or are based upon any of the following
statements, omissions or violations (collectively a “Violation”) by the Company: (a) any untrue statement
or alleged untrue statement of a material fact contained in the Shelf Registration Statement or incorporated by reference therein,
including any Prospectus contained therein or any amendments or supplements thereto, (b) the omission or alleged omission to state
therein a material fact required to be stated therein, or necessary to make the statements therein not misleading, or (c) any
violation or alleged violation by the Company of the Securities Act, the Exchange Act, any state securities Law, or any rule or
regulation promulgated under the Securities Act, the Exchange Act or any state securities Law in connection with the Shelf Registration
Statement; and the Company will reimburse each such indemnified party for any legal or other expenses reasonably incurred by them
in connection with investigating or defending any such Loss or action if it is judicially determined that there was such a Yuhan
Violation; provided however, that the indemnity agreement contained in this Section 5.1 will not apply to amounts
paid in settlement of any such Loss or action if such settlement is effected without the Company’s consent, nor will the
Company be liable in any such case for any such Loss to the extent that it arises out of or is based upon a Violation which occurs
in reliance upon and in conformity with written information furnished by Yuhan and stated to be expressly for use in connection
with the Shelf Registration Statement or an applicable Prospectus.

 

    	ii

     

    

 

5.2       To
the extent permitted by Law, Yuhan will indemnify and hold harmless the Company and each of its directors and its officers against
any Losses (joint or several) to which the Company or any such director, officer, controlling Person, Underwriter or other Third
Party who may become subject under the Securities Act, the Exchange Act or other federal or state law, insofar as such Losses
(or actions in respect thereto) arise out of or are based upon any of the following statements: (a) any untrue statement or alleged
untrue statement of a material fact contained in any Registration Statement or any other document incorporated reference therein,
including any preliminary Prospectus or final Prospectus contained therein or any amendments or supplements thereto, or (b) the
omission or alleged omission to state therein a material fact required to be stated therein, or necessary to make the statements
therein not misleading (collectively, a “Yuhan Violation”), in each case to the extent (and only to
the extent) that such Yuhan Violation occurs in reliance upon and in conformity with written information furnished by Yuhan under
an instrument duly executed by Yuhan; and Yuhan will reimburse any legal or other expenses reasonably incurred by the Company
or any such director, officer, controlling Person, Underwriter or other Third Party in connection with investigating or defending
any such Loss or action if it is judicially determined that there was such a Yuhan Violation; provided, however,
that the indemnity agreement contained in this Section 5.2 will not apply to amounts paid in settlement of any such
Loss or action if such settlement is effected without Yuhan’s consent; provided, further that the obligations of Yuhan hereunder
shall be limited to an amount equal to the net proceeds it receives in such Registration.

 

5.3       Promptly
after receipt by an indemnified party under this Section 5 of notice of the commencement of any action (including any governmental
action), such indemnified party will, if a claim in respect thereof is to be made against any indemnifying party under this Section
5, deliver to the indemnifying party a written notice of the commencement thereof and the indemnifying party will have the
right to participate in, and, to the extent the indemnifying party so desires, jointly with any other indemnifying party similarly
noticed, to assume the defense thereof with counsel mutually satisfactory to the parties; provided, however, that
an indemnified party will have the right to retain its own counsel, with the fees and expenses thereof to be paid by the indemnifying
party, if representation of such indemnified party by the counsel retained by the indemnifying party would be inappropriate due
to actual or potential differing interests between such indemnified party and any other party represented by such counsel in such
proceeding. The failure to deliver written notice to the indemnifying party within a reasonable time of the commencement of any
such action will relieve such indemnifying party of any liability to the indemnified party under this Section 5 to the
extent, and only to the extent, prejudicial to its ability to defend such action, but the omission so to deliver written notice
to the indemnifying party will not relieve it of any liability that it may have to any indemnified party otherwise than under
this Section 5.

 

    	iii

     

    

 

5.4       If
the indemnification provided for in this Section 5 is held by a court of competent jurisdiction to be unavailable to an
indemnified party with respect to any Losses referred to herein, the indemnifying party, in lieu of indemnifying such indemnified
party thereunder, will to the extent permitted by applicable Law contribute to the amount paid or payable by such indemnified
party as a result of such Loss in such proportion as is appropriate to reflect the relative fault of the indemnifying party, on
the one hand, and of the indemnified party, on the other, in connection with the Violation(s) or Yuhan Violation(s), as applicable,
that resulted in such Loss, as well as any other relevant equitable considerations. The relative fault of the indemnifying party
and of the indemnified party will be determined by a court of law by reference to, among other things, whether the untrue or alleged
untrue statement of a material fact or the omission to state a material fact relates to information supplied by the indemnifying
party or by the indemnified party and the parties’ relative intent, knowledge, access to information and opportunity to
correct or prevent such statement or omission; provided, however, that the obligations of Yuhan hereunder shall
be limited to an amount equal to the net proceeds it receives in such Registration; and provided, further, that
no Person guilty of fraudulent misrepresentation within the meaning of Section 11(f) of the Securities Act, shall be entitled
to contribution from any Person who was not guilty of such fraudulent misrepresentation.

 

5.5       The
obligations of the Company and Yuhan under this Section 5 will survive termination of this Agreement and the expiration
or withdrawal of the Shelf Registration Statement. No indemnifying party, in the defense of any such claim or litigation, will,
except with the consent of each indemnified party, consent to entry of any judgment or enter into any settlement which does not
include as an unconditional term thereof the giving by the claimant or plaintiff to such indemnified party of a release from all
liability in respect to such claim or litigation.

 

    	iv

     

    

 

Schedule
1.57

Yuhan Patent Rights

 

Current
as of August 12, 2020

 

	Patent	 	Description	 	Country	 	Application
        No.

        (Date)
	 	Registration
        No.

        

        (Date)
	 	Status
	Compound	 	Diaminopyrimidine derivatives and
    processes for the preparation thereof	 	KR	 	10-2012-0018933

        

        (2012-02-24)
	 	10-1671348

        

        (2016-10-26)
	 	Granted
	 	 	PCT	 	PCT/KR2012/001427

        

        (2012-02-24)
	 	WO2012-115480

        

        (2012-08-30)
	 	-
	 	 	US	 	14/001,489

        

        (2012-02-24)
	 	9,890,138

        

        (2018-02-13)
	 	Granted
	 	 	US(Div)	 	15/848,760

        

        (2012-02-24)
	 	10,227,330

        

        (2019-03-12)
	 	Granted
	 	 	EP	 	12750114.6

        

        (2012-02-24)
	 	2678332

        

        (2016-05-18)
	 	Granted
	 	 	JP	 	2013-555369

        

        (2012-02-24)
	 	5890436

        

        (2016-02-26)
	 	Granted
	 	 	CN	 	201280010406.7

        

        (2012-02-24)
	 	103402997

        

        (2015-08-26)
	 	Granted
	 	 	HK	 	14101293.6

        

        (2012-02-24)
	 	1188215

        

        (2016-02-26)
	 	Granted
	 	 	AU	 	2012221927

        

        (2012-02-24)
	 	2012221927

        

        (2016-08-11)
	 	Granted
	 	 	CA	 	2,827,030

        

        (2012-02-24)
	 	2,827,030

        

        (2019-01-08)
	 	Granted
	 	 	BR	 	11
        2013 020641 1

        

        (2012-02-24)
	 	 	 	Pending
	 	 	MX	 	13/09549

        

        (2012-02-24)
	 	337477

        

        (2016-03-07)
	 	Granted

 

    	Schedule 1.57-1

    	 

    

 

	 	 	 	 	IN	 	1520/MUMNP/2013

        

        (2012-02-24)
	 	 	 	Pending
	 	 	RU	 	2013142187

        

        (2012-02-24)
	 	2587493

        

        (2016-05-25)
	 	Granted
	Compound (backup1)	 	Diaminopyrimidine derivatives and
    processes for the preparation thereof	 	KR	 	10-2012-0018926

        

        (2012-02-24)
	 	10-1671341

        

        (2016-10-26)
	 	Granted
	 	 	PCT	 	PCT/KR2012/001423

        

        (2012-02-24)
	 	WO2012-115478

        

        (2012-08-30)
	 	-
	 	 	US	 	14/001,475

        

        (2012-02-24)
	 	9,850,227

        

        (2017-12-26)
	 	Granted
	 	 	US(Div)	 	15/813,741

        

        (2012-02-24)
	 	10,640,490

        

        (2020-05-05)
	 	Granted
	 	 	EP	 	12749916.8

        

        (2012-02-24)
	 	2678331

        

        (2016-04-27)
	 	Granted
	 	 	JP	 	2013-555368

        

        (2012-02-24)
	 	5980236

        

        (2016-08-05)
	 	Granted
	 	 	CN	 	201280010354.3

        

        (2012-02-24)
	 	103391935

        

        (2015-12-23)
	 	Granted
	 	 	HK	 	14101278.5

        

        (2012-02-24)
	 	1188214

        

        (2016-11-18)
	 	Granted
	 	 	AU	 	2012221925

        

        (2012-02-24)
	 	2012221925

        

        (2016-08-18)
	 	Granted
	 	 	CA	 	2,827,072

        

        (2012-02-24)
	 	2,827,072

        

        (2019-01-08)
	 	Granted
	 	 	BR	 	11
        2013 019942 3

        

        (2012-02-24)
	 	 	 	Pending
	 	 	MX	 	13/09627

        

        (2012-02-24)
	 	336155

        

        (2016-01-07)
	 	Granted
	 	 	IN	 	1519/MUMNP/2013

        

        (2012-02-24)
	 	329365

        

        (2020-01-14)
	 	Granted
	 	 	RU	 	2013142188

        

        (2012-02-24)
	 	2587981

        

        (2016-06-02)
	 	Granted

 

    	Schedule 1.57-2

    	 

    

 

	Compound (backup2)	 	Diaminopyrimidine
    derivatives and processes for the preparation thereof	 	KR	 	10-2011-0016986

        

        (2011-02-25)
	 	10-1682417

        

        (2016-11-29)
	 	Granted
	 	 	PCT	 	PCT/KR2012/001425

        

        (2012-02-24)
	 	WO2012-115479

        

        (2012-08-30)
	 	-
	Compound (backup3)	 	Bicyclic derivatives containing
    pyrimidine ring and processes for the preparation thereof	 	KR	 	10-2013-0058843

        

        (2013-05-24)
	 	10-1657616

        

        (2016-09-08)
	 	Granted
	 	 	PCT	 	PCT/KR2014/004636

        

        (2014-05-23)
	 	WO2014-189331

        

        (2014-11-27)
	 	-
	Process	 	Novel processes for preparing a
    diaminopyrimidine derivative or acid addition salt thereof	 	KR	 	10-2018-0057088

        

        (2018-05-18)
	 		 	Pending
	 	 	PCT	 	PCT/KR2019/005859

        

        (2019-05-16)
	 	WO2019-221522

        

        (2019-11-21)
	 	-
	Formulation	 	Pharmaceutical compositions comprising a diaminopyrimidine
    derivative or pharmaceutically acceptable salt thereof and processes for preparing the same	 	KR	 	10-2020-0084595

        

        (2020-07-09)
	 	 	 	Pending

 

    	Schedule 1.57-3

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