Document:

Exhibit
10.12

 

Execution
Copy

 

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.

 

    	 

     

    

 

“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.

 

    	 	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.

 

    	 	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.

 

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“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”).

 

    	 	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”).

 

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(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).

 

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(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.

 

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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.

 

    	 	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.

 

    	 	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).

 

    	 	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.

 

    	 	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.

 

    	 	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.

 

    	 	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]

 

    	 	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.

 

    	ivExhibit
10.13

 

LICENSE
AGREEMENT

 

BY
AND BETWEEN

 

PROCESSA
PHARMACEUTICALS, INC.

 

AND

 

ELION
ONCOLOGY, INC

 

DATED
AS OF AUGUST 23, 2020

 

     

     

    

 

Table
of Contents

  

	 	Page
	 	 
	ARTICLE
    I DEFINITIONS	1
	ARTICLE
    II GRANTS OF RIGHTS	12
	2.1
    Condition Precedent.	12
	2.2
    Licenses.	13
	2.3
    Rights Retained by the Parties	13
	2.4
    Section 365(n) of the Bankruptcy Code	14
	2.5
    Transfer of Elion Material and Know-How	14
	ARTICLE
    III DEVELOPMENT	14
	3.1
    General	14
	3.2
    Exchange of Information Regarding Development	14
	ARTICLE
    IV COMMERCIALIZATION	15
	4.1
    General	15
	4.2
    Commercialization Plans	15
	ARTICLE
    V DILIGENCE	15
	5.1
    Commercially Reasonable Efforts	15
	5.2
    Termination for Failure to Meet Diligence Obligations	15
	ARTICLE
    VI FINANCIAL PROVISIONS	16
	6.1
    Equity and Cash Upon Satisfying Condition Precedent	16
	6.2
    Demand Registration	16
	6.3
    Cessation of Demand Registration	16
	6.4
    Development and Regulatory Milestone Payments	17
	6.5
    Anti-Dilution from Reverse Split and Other Adjustments	17
	6.6
    Development and Commercialization Costs	18
	6.7
    Sales Milestone Payments	18
	6.8
    Product Royalties	18
	6.9
    Sublicense	19
	6.10
    Reports; Payments	20
	6.11
    Books and Records; Audit Rights	21
	6.12
    Tax Matters	21
	6.13
    Payment Method and Currency Conversion	22
	6.14
    Blocked Payments	22
	6.15
    Late Payments	22

 

    	 	-i-	 

     

    

 

Table
of Contents

(continued)

 

	 	Page
	 	 
	ARTICLE
    VII INTELLECTUAL PROPERTY OWNERSHIP, PROTECTION AND RELATED MATTERS	23
	7.1
    Ownership of Inventions	23
	7.2
    Prosecution and Maintenance of Patent Rights.	23
	7.3
    Third Party Infringement.	24
	7.4
    Patent Invalidity Claim	26
	7.5
    Claimed Infringement	26
	7.6
    Patent Term Extensions	27
	7.7
    Patent Marking	27
	7.8
    Certification under Drug Price Competition and Patent Restoration Act.	27
	7.9
    Privileged Communications	28
	7.10
    Settlement	28
	ARTICLE
    VIII CONFIDENTIAL INFORMATION	28
	8.1
    Treatment of Confidential Information	28
	8.2
    Confidential Information	29
	8.3
    Publications	29
	8.4
    Press Releases and Other Disclosures	30
	8.5
    Equitable Relief	30
	ARTICLE
    IX REPRESENTATIONS, WARRANTIES AND COVENANTS	31
	9.1
    Elion’s Representations	31
	9.2
    Processa’s Representations	33
	9.3
    Elion Covenants	33
	9.4
    Processa Covenant	34
	9.5
    No Warranty	34
	ARTICLE
    X INDEMNIFICATION	34
	10.1
    Indemnification in Favor of Elion	34
	10.2
    Indemnification in Favor of Processa	35
	10.3
    General Indemnification Procedures	36
	10.4
    Insurance	37

 

    	 	-ii-	 

     

    

 

Table
of Contents

(continued)

 

	 	Page
	 	 
	ARTICLE
    XI TERM AND TERMINATION	38
	11.1
    Term	38
	11.2
    Termination for Failure to Satisfy Condition Precedent	38
	11.3
    Termination for Convenience	38
	11.4
    Termination for Cause	38
	11.5
    Additional Termination by Elion	38
	11.6
    Termination for Insolvency	38
	11.7
    Termination for Challenge of Elion Patent Rights	39
	11.8
    Consequences of Termination	39
	11.9
    Effect of Termination or Expiration; Accrued Rights and Obligations	42
	11.10
    Survival	42
	ARTICLE
    XII MISCELLANEOUS	42
	12.1
    Governing Law; Jurisdiction	42
	12.2
    Dispute Resolution	42
	12.3
    Waiver	43
	12.4
    Notices	43
	12.5
    Entire Agreement	43
	12.6
    Severability	44
	12.7
    Assignment	44
	12.8
    Counterparts; Exchange by Facsimile	44
	12.9
    Force Majeure	44
	12.10
    Third-Party Beneficiaries	44
	12.11
    Relationship of the Parties	45
	12.12
    Performance by Affiliates	45
	12.13
    No Consequential or Punitive Damages	45

 

    	 	-iii-	 

     

    

 

LICENSE
AGREEMENT

 

THIS
LICENSE AGREEMENT is entered into as of this 23 day of August, 2020 (the “Effective Date”), by and between
Processa Pharmaceuticals, Inc. a corporation organized under the laws of Delaware, having a business address at 7380 Coca Cola
Drive, Suite 106, Hanover, MD 21076 (“Processa”), and Elion Oncology, Inc. a corporation organized under the
laws of Maryland whose principal place of business is at 4800 Hampden Lane, Bethesda, MD 20814 (“Elion”).

 

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

 

WHEREAS,
Processa desires to obtain a license of the Elion Patent Rights and the Elion Know-How to Develop and Commercialize Compounds
and Products (each as defined below), under the terms and conditions set forth herein, and Elion 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 New York City, New York 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; provided, however, that the first Calendar Quarter shall begin on the Effective
Date and end on the last day of the calendar quarter during which the Effective Date occurs; provided, that, the final Calendar
Quarter shall end on the last day of the Term.

 

    	 	1	 

     

    

 

1.5
“Calendar Year”. Calendar Year means each calendar year during the Term; provided, however, that
the first Calendar Year shall begin on the Effective Date and end on December 31 of the calendar year during which the Effective
Date occurs; provided, that, the final Calendar Year shall end on the last day of the Term.

 

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.

 

    	 	2	 

     

    

 

1.9
“Compound”. Compound means Eniluracil 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 (or their respective Affiliates or assignees).

 

1.10
“Clinical Trial” shall mean any study in which human subjects are dosed with a drug, whether approved or investigational,
including any Phase 1, 2, 3 or 4 clinical study.

 

1.11
“Condition Precedent Period”. Condition Precedent Period means the period of time beginning on the Effective
Date and ending on October 30, 2020.

 

1.12
“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. Notwithstanding the foregoing, for the purpose
of defining whether intellectual property, Patent Rights, Know-How or Confidential Information is Controlled by a Party, if such
intellectual property, Patent Rights, Know-How or Confidential Information is first acquired, licensed or otherwise made available
to such Party after the Effective Date and if the use, practice or exploitation thereof by or on behalf of the other Party, its
Affiliates or sublicensees would require the first Party to pay any amounts to the Third Party from which the first Party acquired,
licensed or otherwise obtained such intellectual property, Patents, Know-How or Confidential Information (“Additional
Amounts”), such intellectual property, Patent Rights, Know-How or Confidential Information shall be deemed to be Controlled
by the first Party only if the other Party agrees to pay (if necessary) and does in fact pay all Additional Amounts with respect
to such other Party’s use of or license to such intellectual property, Patent Rights, Know-How or Confidential Information
to the extent specified in this Agreement.

 

1.13
“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).

 

1.14
“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).

 

    	 	3	 

     

    

 

1.15
“Elion Intellectual Property”. Elion Intellectual Property means the Elion Know-How and the Elion Patent Rights.

 

1.16
“Elion Know-How”. Elion Know-How means all Know-How that is Controlled by Elion 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
Elion is acquired by a Third Party, “Elion Know-How” shall exclude any Know-How that (a) is Controlled by such Third
Party or the Affiliates of such Third Party (other than Elion and the Persons that were Elion’s Affiliates immediately prior
to the closing of such acquisition transaction (such Affiliates, “Elion Pre-Existing Affiliates”)) (“Elion
Excluded Affiliates”) and (b) was not Controlled by Elion or any of the Elion Pre-Existing Affiliates immediately prior
to the closing of such acquisition transaction; provided further that, if, after the closing of such acquisition, any such
Elion Excluded Affiliate Develops or Commercializes any Compound or Product or otherwise performs any activities or obtains any
rights with respect to any Compound or Product, such Affiliate will cease to be an Elion Excluded Affiliate and applicable Know-How
that is Controlled by such Affiliate shall be included in Elion Know-How.

 

1.17
“Elion Patent Rights”. Elion Patent Rights means all Patent Rights in the Territory that are Controlled by
Elion 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 Elion Patent Rights existing as of the Effective Date are set forth on Schedule ‎1.16;
provided, however, that, if Elion is acquired by a Third Party, “Elion Patent Rights” shall exclude
any Patent Rights that (a) are Controlled by such Third Party or the Affiliates of such Third Party (other than Elion and Elion
Pre-Existing Affiliates) and (b) were not Controlled by Elion or any of the Elion Pre-Existing Affiliates immediately prior to
the closing of such acquisition transaction; provided further that, if, after the closing of such acquisition, any such
Elion Excluded Affiliate Develops or Commercializes any Compound or Product or otherwise performs any activities or obtains any
rights with respect to any Compound or Product, such Affiliate will cease to be an Elion Excluded Affiliate and applicable Patent
Rights that are Controlled by such Affiliate shall be included in Elion Patent Rights.

 

1.18
“EMA”. EMA means the European Medicines Agency and any successor agency.

 

1.19
“FDA”. FDA means the U.S. Food and Drug Administration and any successor agency.

 

1.20
“Field”. Field means all medical uses.

 

1.21
“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 (unless
any such entity is an end-user of the Product) 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.

 

    	 	4	 

     

    

 

1.22
“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.

 

1.23
“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 U.S., and all amendments and supplements thereto.

 

1.24
“Joint Intellectual Property”. Joint Intellectual Property means the Joint Inventions and Joint Patent Rights.

 

1.25
“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.

 

1.26
“Law” or “Laws”. Law or Laws means all laws, statutes, rules, regulations, orders, judgments,
or ordinances of any Governmental Authority.

 

1.27
“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), 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).

 

1.28
“Major Market”. Major Market means each of the United States, Canada, France, Germany, Italy, Spain, the United
Kingdom, the People’s Republic of China (including Hong Kong, Taiwan and Macau), Republic of Korea, Australia, New Zealand
and Japan.

 

1.29
“Manufacture” or “Manufacturing”. Manufacture or Manufacturing means activities directed
to producing, manufacturing, processing, filling, finishing, packaging, labeling, quality assurance testing and release, shipping
and storage of a product.

 

1.30
“MHLW”. MHLW means the Japanese Ministry of Health, Labour and Welfare, and any successor agency.

 

    	 	5	 

     

    

 

1.31
“NDA”. NDA means a New Drug Application, as defined in the Act, 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 U.S.,
and all amendments and supplements thereto.

 

1.32
“Net Sales”. Net Sales means the gross amounts billed or invoiced by Processa, or any of its Affiliates or
Sublicensees or assignees, to any Third Party 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:

 

(a)
Volume, cash or trade discounts, credits or allowances, 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;

 

(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 25% of the originally billed or invoiced amount;

 

(e)
Bad debts, uncollectible amounts, and collection costs relating to the sale of Products that are actually written off, provided
that, if the debt is thereafter paid, the corresponding amount shall be added to the Net Sales of the period during which
it is paid; 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,
provided that the subsequent resale of such Products to a Third Party are included in the computation of 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.

 

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).

 

    	 	6	 

     

    

 

For
purposes of calculating Net Sales for Combination Products in each applicable country:

 

(a)
If a Product is sold in any country as part of a Combination Product involving a co-formulation or co-packaging of the Compound
with an Other API for which Processa has not acquired (whether by acquisition or licensing) all of the exclusive rights to commercialize
such Other API in such country, then the Net Sales for such Combination Product in such country used to determine Net Sales Milestone
Payments, Net Sales Royalties, and any other use of Net Sales in this Agreement will be equal to the positive difference (if any)
between (x) Net Sales of such Combination Product calculated as above (with the deductions set forth in Section1.32 (a) –
(f)) minus (y) all of the direct costs incurred by Process to obtain, combine and manufacture the Other API into the Combination
Product in such country or to obtain, combine and manufacture the other pharmaceutical product which includes the Other API into
the Combination Product in such country.

 

(b)
If a Product is sold in any country as part of a Combination Product involving a co-formulation or co-packaging of the Compound
with an Other API for which (i) Processa has acquired (whether by acquisition or licensing) all of the exclusive rights to commercialize
such Other API in such country and (ii) such Other API has demonstrated through pre-clinical and/or clinical studies an effect
on cancer, then the Net Sales for such Combination Product in such country used to determine Net Sales Milestone Payments, Net
Sales Royalties, and any other use of Net Sales in this Agreement will be equal to 35% of the positive difference (if any) between
(x) Net Sales of such Combination Product calculated as above (with the deductions set forth in Section1.32 (a) – (f)) minus
(y) all of the direct costs incurred by Processa (including for clarity all royalties, milestones and other payments ) to obtain,
combine and manufacture the Other API in the Combination Product in such country or to obtain, combine and manufacture the other
pharmaceutical product which includes the Other API into the Combination Product in such country.

 

(c)
If a Product is sold in any country as part of a Combination Product involving a co-formulation or co-packaging of the Compound
with an Other API for which (i) Processa has acquired (whether by acquisition or licensing) all of the exclusive rights to commercialize
such Other API in such country and (ii) such Other API has demonstrated through pre-clinical and/or clinical studies no effect
on cancer, then the Net Sales for such Combination Product in such country used to determine Net Sales Milestone Payments, Net
Sales Royalties, and any other use of Net Sales in this Agreement will be equal to 50% of the positive difference (if any) between
(x) Net Sales of such Combination Product calculated as above (with the deductions set forth in Section1.32 (a) – (f)) minus
(y) all of the direct costs incurred by Process (including for clarity all royalties, milestones and other payments ) to obtain,
combine, and manufacture the Other API in the Combination Product in such country or to obtain, combine and manufacture the other
pharmaceutical product which includes the Other API into the Combination Product in such country.

 

    	 	7	 

     

    

 

1.33
“Party”. Party means either Elion or Processa; “Parties” means both Elion and Processa.

 

1.34
“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.

 

1.35
“Payments”. Payments means royalties and other amounts payable by Processa to Elion pursuant to this Agreement.

 

1.36
“Person”. Person means any natural person or any corporation, company, partnership, joint venture, firm, Governmental
Authority, or other entity, including a Party. .

 

1.37
“Phase 1B”. Phase 1B means the clinical study to be conducted pursuant to Protocol ELC101-20 entitled a “Phase
1b Dose-escalation Study of the Safety and Pharmacokinetics of Fixed-dose Eniluracil with Escalating Doses of Capecitabine Administered
Orally in Patients with Advanced, Refractory Gastrointestinal (GI) Tract Tumors with Dose Confirmation at the Recommended Phase
2 Dose (RP2D),” as approved by the FDA pursuant to IND for the Product or, after prior notification and discussion with
Elion when commercially practicable, any FDA accepted modification of the Protocol that would still classify it as a Phase 1B
or Phase 2 study. As used herein, “Dose Confirmation” shall mean any dose confirmation in the Phase 1B or any dose
confirmation that facilitates a Phase 2.

 

1.38
“Phase 2”. Phase 2 means a human clinical trial of a product in any country that would satisfy the requirements
of U.S. 21 C.F.R. Part 312.21(b) and is intended to explore a variety of doses, dose response, and duration of effect, and to
generate evidence of clinical safety and effectiveness for a particular indication or indications in a target patient population,
or a similar clinical study prescribed by the relevant Regulatory Authorities in a country other than the United States.

 

1.39
“Phase 3”. Phase 3 means a human clinical trial of a product in any country that would satisfy the requirements
of 21 C.F.R. §312.21(c), as amended (or the non-United States equivalent thereof) and is intended to (a) establish that the
product is safe and efficacious for its intended use, (b) define contraindications, warnings, precautions and adverse reactions
that are associated with the product in the dosage range to be prescribed, and (c) support Regulatory Approval for such product.

 

1.40
“Phase 4”. Phase 4 means a human clinical trial of a product which is (a) conducted to satisfy a requirement
of a Regulatory Authority in order to maintain a Regulatory Approval or (b) conducted voluntarily after Regulatory Approval of
the product has been obtained from an appropriate Regulatory Authority for enhancing marketing or scientific knowledge of an approved
indication.

 

    	 	8	 

     

    

 

1.41
“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 U.S. 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 U.S. 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.

 

1.42
“Processa Intellectual Property” means, collectively, Processa Know-How and Processa Patent Rights.

 

1.43
“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 Develops or Commercializes any Compound or Product
or otherwise performs any activities or obtains any rights with respect to any Compound or Product, such Affiliate will cease
to be a Processa Excluded Affiliate and applicable Know-How that is Controlled by such Affiliate shall be included in Processa
Know-How.

 

1.44
“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 Develops or Commercializes any Compound or Product or otherwise performs
any activities or obtains any rights with respect to any Compound or Product, such Affiliate will cease to be a Processa Excluded
Affiliate and applicable Patent Rights that are Controlled by such Affiliate shall be included in Processa Patent Rights.

 

    	 	9	 

     

    

 

1.45
“Product”. Product means any pharmaceutical preparation containing one or more Compounds as its only active
ingredient(s) or a Combination Product with the active ingredient. For the avoidance of doubt, nothing in this Agreement grants
to Processa any right or license under any Patent Rights or Know-How Controlled by Elion with respect to any Other API.

 

1.46
“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.

 

1.47
“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, EMA or MHLW.

 

1.48
“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
U.S. under the Hatch-Waxman Act.

 

1.49
“Satisfactory Public Offering”. Satisfactory Public Offering means the firm commitment underwritten public
offering of shares of common stock of Processa, par value $0.0001 per share (the “Common Stockk” pursuant to a Registration
Statement on Form S-1 filed and declared effective by the SEC, as more specifically described and satisfying all of the conditions
in Sections 2.

 

1.50
“Satisfactory Public Offering Securities”. Satisfactory Public Offering Securities means shares of Common Stock
issued to investors in the Satisfactory Public Offering.

 

1.51
“Senior Executive”. Senior Executive means, with respect to Elion, the CEO of Elion, 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 Elion and Processa.

 

1.52
“Sublicensee”. Sublicensee means a Third Party that has been granted a sublicense under the rights granted
to Processa pursuant to Section ‎2.2 of this Agreement, beyond the mere right to purchase Compound or Product from Processa
or its Affiliates.

 

1.53
“Territory”. Territory means all countries of the world.

 

1.54
“Third Party”. Third Party means any Person other than Elion or Processa or any of their respective Affiliates.

 

    	 	10	 

     

    

 

1.55
“U.S.”. U.S. means the United States of America, including its territories and possessions.

 

1.56
“Valid Claim”. Valid Claim means any claim of (a) an issued and unexpired patent within the Elion 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 Elion 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).

 

1.57
Additional Definitions. Each of the following definitions is set forth in the Section of this Agreement indicated below:

 

	 	Definition:	Section:
	 	Abandoned
    Patents	Section
    ‎7.2(a)
	 	Agents	Section
    ‎8.1
	 	Commercialization
    Plan	Section
    ‎4.2
	 	Condition
    Precedent	Section
    2.1(a)
	 	Condition
    Precedent Satisfaction Date	Section
    2.1(a)
	 	Confidential
    Information	Section
    ‎8.2
	 	Courts	Section
    ‎12.1
	 	Demand
    Registration	Section
    6.2
	 	Effective
    Date	Preamble
	 	Elion	Preamble
	 	Elion
    Excluded Affiliates	Section
    ‎1.15
	 	Elion
    Parties	Section
    ‎10.1
	 	Elion
    Pre-Existing Affiliates	Section
    ‎1.15
	 	Elion
    Sole Inventions	Section
    ‎7.1(a)
	 	First
    Tranche Shares	Section
    6.1
	 	Indemnified
    Party	Section
    ‎10.3(a)
	 	Indemnifying
    Party	Section
    ‎10.3(a)
	 	Infringement
    Claim	Section
    ‎7.3(a)
	 	Joint
    Inventions	Section
    ‎7.1(b)
	 	Joint
    Patent Rights	Section
    ‎7.2(b)
	 	Late
    Payment Notice	Section
    6.15
	 	Litigation
    Conditions 	Section
    10.3(a)
	 	MRS	Section
    6.4
	 	Offering
    Price	Section
    2.1(a)
	 	Paragraph
    IV Claim	Section
    ‎7.8(a)
	 	Periodic
    Report	Section
    6.10
	 	Product
    Liability Claim	Section
    ‎10.1(b)
	 	Processa	Preamble
	 	Processa
    Excluded Affiliates	Section
    ‎1.42
	 	Processa
    Parties	Section
    ‎10.2
	 	Processa
    Pre-Existing Affiliates	Section
    ‎1.42
	 	Processa
    Sole Inventions	Section
    ‎7.1(a)
	 	Royalty
    Term	Section
    6.8(b)
	 	Second
    Tranche Shares	Section
    6.1
	 	Sole
    Inventions	Section
    ‎7.1(a)
	 	Sublicensee
    Intellectual Property	Section
    ‎2.2(b)
	 	Sublicense
    Materials	Section
    2.2(b)
	 	Taxes	Section
    6.12
	 	Term	Section
    ‎11.1
	 	Third
    Party Claims	Section
    10.1
	 	Third
    Party Patent Licenses	Section
    ‎6.8(c)

 

    	 	11	 

     

    

 

1.58
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.

 

ARTICLE
II

GRANTS OF RIGHTS

 

2.1
Condition Precedent.

 

(a)
The grant of license rights is conditioned upon Prosessa’s closing of a Satisfactory Public Offering by October 30, 2020
pursuant to which (i) Processa has raised in excess of $15,000,000 in gross proceeds from the sale of shares of its Common Stock
pursuant to a firm commitment underwriting registered on a Registration Statement on Form S-1 filed and declared effective by
the SEC (such price per share set forth in the applicable Registration Statement on Form S-1 which has been declared effective,
the “Offering Price”), and (ii) Processa has listed its Common Stock for trading on the Nasdaq Capital Markets
(collectively, the “Condition Precedent”) during the Condition Precedent Period. The date on which Processa
and Elion satisfy the Condition Precedent, if any, shall be the “Condition Precedent Satisfaction Date.”

 

    	 	12	 

     

    

 

(b)
Expiration of the Agreement. If, for any reason (including a failure to meet the conditions in Sections 2.1 prior to the
end of the Condition Precedent Period) the Condition Precedent is not fully satisfied within the Condition Precedent Period, then
this Agreement shall terminate in accordance with Section ‎11.2.

 

2.2
Licenses.

 

(a)
License. Subject to the terms of this Agreement, upon Processa’s satisfaction of the Condition Precedent pursuant
to Section ‎2.1, Elion shall, and hereby does, grant to Processa an exclusive (even as to Elion and its Affiliates), royalty-bearing
right and license, including the right to sublicense in accordance with Section ‎2.2‎(b), under the Elion Intellectual
Property and Elion’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)
Sublicenses. From and after the Condition Precedent Satisfaction Date, Processa shall have the right to grant sublicenses
under the licenses to Elion Intellectual Property and Elion’s interest in the Joint Intellectual Property granted to Processa
under Section ‎2.2(a) to its Affiliates and to Third Parties subject to Elion’s prior written approval; provided,
however, that any such sublicense shall be subject to all applicable terms and conditions of this Agreement. Each agreement
with each Sublicensee must include grants of rights to Processa sufficient to enable Processa to grant substantially the rights
set forth in Sections ‎11.8(b) through ‎11.8(f) with respect to (i) 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”); (ii) 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; (iii) all Manufacturing agreements to which
such Sublicensee is a party that are related to Compounds or Products; (iv) all of such Sublicensee’s inventory of Compounds
and Products existing as of the applicable date; and (v) all trademarks owned by such Sublicensee and used solely in connection
with the Products, along with all associated goodwill ((i) – (v), collectively, “Sublicense Materials”).

 

2.3
Rights Retained by the Parties. Any rights of Elion 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.

 

    	 	13	 

     

    

 

2.4
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 Section ‎2.1, ‎2.2 or ‎11.8(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.”

 

2.5
Transfer of Elion Material and Know-How. During the period beginning on the Condition Precedent Satisfaction Date and ending
on the date that is thirty (30) days after the Condition Precedent Satisfaction Date, Elion shall transition Elion Know-How to
Processa and provide Processa with reasonable amounts of consultation regarding the transferred Elion Know-How. In addition, Elion,
will transfer all material to Processa related to Eniluracil including but not limited to i) documents including communications,
reports, white papers and supporting material, lab or study notes, manufacturing documents, and similar material, ii) drug substance,
iii) drug product, iv) know-how related to the development of Eniluracil, and v) regulatory approvals or clearances or submissions,
such as transferring the Eniluracil IND to Processa.

 

ARTICLE
III

DEVELOPMENT

 

3.1
General. From and after the Condition Precedent Satisfaction Date, and subject to the terms of this Agreement, including
the requirements of ‎ARTICLE V, Processa (together with 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; provided, however, that, prior to the Condition Precedent Satisfaction
Date, Elion will reasonably cooperate with Processa, as Processa may reasonably request and at Processa’s expense, to enable
Processa to interact with FDA in order to discuss the Development of and regulatory activities with respect to Compounds and Products
for the indications Processa desires to pursue with respect to such Compounds and Products. If Processa requests Elion’s
cooperation as described above, the Parties shall mutually agree in advance on a budget therefor, and Processa shall reimburse
Elion for any expenses incurred by Elion under this Section ‎3.1 within thirty (30) days after receiving an invoice therefor.

 

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 a Major Market, Processa shall provide Elion
with a reasonably detailed report describing Processa’s Development activities and the summary results thereof with respect
to all Compounds and Products.

 

    	 	14	 

     

    

 

ARTICLE
IV

COMMERCIALIZATION

 

4.1
General. From and after the Condition Precedent Satisfaction Date, and subject to the terms of this Agreement, including
the requirements of ‎ARTICLE V, Processa (together with 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.

 

4.2
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 Elion, for information purposes only, 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”).

 

ARTICLE
V

DILIGENCE

 

5.1
Commercially Reasonable Efforts. From and after the Condition Precedent Satisfaction Date during the Term, Processa shall,
directly or through its Affiliates or Sublicensees, use Commercially Reasonable Efforts to Develop and obtain Regulatory Approval
for one (1) Product in the Field in the U.S. 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)
Dosing of a first patient in a Phase 1B trial for the Product within 12 months from the Condition Precedent Satisfaction Date;
and

 

(b)
Dosing of a first patient in a Phase 2 or Phase 3 trial for the Product within 48 months from the Condition Precedent Satisfaction
Date.

 

5.2
Termination for Failure to Meet Diligence Obligations. If, at any time during the Term, Processa fails to timely achieve
any of the foregoing milestones, or if Elion reasonably believes that Processa (itself and through its Affiliates and Sublicensees
or assignees) has not complied with its obligations under Section ‎5.1, Elion shall provide written notice to Processa specifying
the nature of such reasonable belief, and Elion may terminate this Agreement pursuant to Section ‎11.5.

 

    	 	15	 

     

    

 

ARTICLE
VI

FINANCIAL PROVISIONS

 

6.1
Equity and Cash Upon Satisfying Condition Precedent. In partial consideration for the rights granted to Processa hereunder,
if the Condition Precedent pursuant to Section 2.1 is satisfied, Processa: (a) shall pay to Elion, as Elion shall direct, $100,000
in immediately available funds within five (5) Business Days following the Condition Precedent Satisfaction Date; (b) shall issue
to Elion (which may include its designees who are Affiliates of Elion ), for no additional consideration, 100,000 shares of Common
Stock within twenty (20) Business Days following the Condition Precedent Satisfaction Date (the “First Tranche Shares”)
and (c) subject to the proviso to this sentence, shall for no additional consideration issue 400,000 shares of Common Stock (the
“Second Tranche Shares”) directly to a grantor trust at Elion’s sole cost (the “Trust”), which shares
shall be held by the trustee of such trust in a brokerage account held by Merrill Lynch or a similar brokerage firm if possible,
pursuant to a grantor trust arrangement that is consistent with the principles of IRS Rev. Proc. 92-64 and IRS Notice 2000-56;
provided that (x) the trustee of the grantor trust shall be required to release the Second Tranche Shares from the grantor trust
to Elion (or its designees who are Affiliates of Elion) on January 15, 2021, and (y) in the case that the Offering Price is less
than $8.34, then the number of Second Tranche Shares shall be increased (and therefore Processa shall cause additional Second
Tranche Shares to be issued to and held by such grantor trust) to equal the sum of 100,000 shares plus the quotient obtained by
dividing $2,500,000 by the Offering Price. By way of example, if the Offering Price equals $5 per share, then the number of
Second Tranche Shares issued by Processa and held by the grantor trust would equal 600,000 (which is the sum of 100,000 plus 500,000).
The First Tranche Shares and Second Tranche Shares will contain a restrictive legend that restricts the sale, transfer, or
disposition of these shares (“Lock-up”) as follows: 50% of the shares of Common Stock shall subject to the
Lock-up for six months following the Effective Date; 25% of the shares of Common Stock shall be subject to the Lock-up for nine
months following the Effective Date and the remaining 25% of the shares of Common Stock shall be subject to the Lock-up for one
year following the Effective Date. In addition, the shares of Common Stock received by Elion shall contain a customary restrictive
legend that specifies that such shares of Common Stock have not been registered with the Securities and Exchange Commission (“SEC”)
until such time as Processa shall receive a satisfactory opinion of legal counsel (which may be Processa’s legal counsel)
that specifies that such restrictive legend is no longer required by law; it being understood and agreed that Processa shall reimburse
Elion for the reasonable costs associated with such opinion if not delivered by Processa’s legal counsel.

 

6.2
Demand Registration. Notwithstanding the foregoing, unless a resale exemption from registration is available to Elion for
the shares proposed to be transferred (such as Rule 144 of the Securities Act of 1933, as amended) pursuant to Section 6.1, at
any time following the date that is one hundred and eighty (180) days following the Effective Date, Elion may request that the
shares of Common Stock issued to it pursuant to this Article VI be registered for resale with the SEC from time to time by Processa
(without an underwriter or placement agent) (the “Demand Registration”). Upon receipt of a Demand Registration,
Processa shall use commercially reasonable efforts to register such shares for resale by Elion and shall use its commercially
reasonable efforts to and keep such registration statement effective for at least 12 months (or such shorter period as will terminate
when all the shares covered by the registration statement have been sold or withdrawn).

 

6.3
Cessation of Demand Registration. The Demand Registration right shall cease and no longer be applicable once the shares
issued to Elion issued under Section 6.1 are sold or may be sold without volume limitation restrictions under Rule 144 of the
Securities Act of 1933, as amended, provided, however, that if a director, officer, employee or agent of Elion should become a
member of Processa’s Board of Directors or employed as an Officer in Processa after the Effective Date, the Demand Registration
right shall cease and no longer be applicable once the shares issued to Elion under Section 6.1 are sold or may be sold under
Rule 144 of the Securities Act of 1933, as amended, in compliance with the requirements for sales by Affiliates (as defined under
Rule 144). Processa agrees that the rights granted to Elion under this Article VI shall be assignable to the assignees of the
shares of Common Stock of Processa who are designated by Elion and who are Affiliates of Elion provided that the Rule 144 holding
period with respect to such shares is not extended as a result of such transfer (in which case, the Demand Registration right
shall immediately cease with respect to such shares).

 

    	 	16	 

     

    

 

6.4
Development and Regulatory Milestone Payments. The development and regulatory milestone payments shall be provided to Elion
in 2 forms: Milestone Restricted Shares which shall be identical to the shares of Common Stock which constitute the Satisfactory
Public Offering Securities (“MRSs”) or cash. The MRSs shall be issued within five (5) Business Days following
satisfaction of the applicable Milestone Event and shall be subject to a six month Lock-up following the date of satisfaction
of such applicable Milestone Event. All MRSs shall contain a customary restrictive legend that specifies that such shares of Common
Stock have not been registered with the SEC until such time as Processa shall receive a satisfactory opinion of legal counsel
(which may be Processa’s legal counsel) that specifies that such restrictive legend is no longer required by law; it being
understood and agreed that Processa shall reimburse Elion for the reasonable costs associated with such opinion if not delivered
by Processa’s legal counsel. Each milestone cash payment owed by Processa to Elion pursuant to this Section 6.4 shall be
payable by Processa within thirty (30) days following the first achievement of the corresponding milestone event. For the avoidance
of doubt each milestone payment, whether it be MRSs or cash, is only payable once, regardless of the number of times such milestone
may be achieved by Processa, its Affiliates, and Sublicensees. For purposes of this Section 6.4, if the Initiation of a clinical
trial of a Licensed Product satisfies more than one of the clinical milestone events below (e.g., if the first clinical
trial of a Licensed Product is a Pivotal Trial), then the milestone payments corresponding to both of such clinical milestone
events shall be made simultaneously upon the dosing of the first patient of such clinical trial. In addition, if a given milestone
event is achieved by a Licensed Product without one or more preceding milestone events having been achieved by such Licensed Product,
then the milestone payments corresponding to such skipped milestone events shall be made simultaneously upon achievement of such
milestone event by such Licensed Product.

 

	Milestone
    Event	 	Milestone
    Payment ($)
	1. 1st Year Anniversary
    of Effective Date	 	100,000 MRSs
	2. 2nd Year Anniversary
    of Effective Date	 	100,000 MRSs
	3. 1st Patient in
    Dose Confirmation Study	 	100,000 MRSs
	3. NDA Submission	 	300,000 MRSs
	4. 1st
    FDA Approval in US	 	$5,000,000
	5. 2nd FDA Approval
    in US	 	$3,000,000
	6. 1st Regulatory
    Approval Outside US	 	$2,000,000
	7. 2nd Regulatory
    Approval Outside US	 	$2,000,000

 

6.5
Anti-Dilution from Reverse Split and Other Adjustments. Processa hereby agrees that if the Common Stock (including the
First Tranche Shares and Second Tranche Shares) and MRSs issuable pursuant to this Article VI (or any securities to which such
shares are converted or otherwise exchanged into as a result of any merger, consolidation or other comparable business reorganization)
are the subject of any reverse stock split, stock dividend or other comparable adjustment, then Processa covenants and agrees
to cause and otherwise ensure that the Common Stock (including the First Tranche Shares and Second Tranche Shares) and MRSs (and
any conversion securities or other consideration) will be proportionately adjusted accordingly to achieve a result as if no such
reverse stock split, stock dividend or other comparable adjustment occurred.

 

    	 	17	 

     

    

 

 

6.6
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.

 

6.7
Sales Milestone Payments. Processa shall pay Elion the one-time, non-refundable, non-creditable sales milestone payments
set forth in the table below within thirty (30) days after the end of the first Calendar Quarter during which the Worldwide Annual
Net Sales first reach the values indicated below. For clarity, the milestone payment reached will apply once and only once when
the milestone is first achieved (and more than one payment may occur in each Calendar Year). Thereafter, the milestone will no
longer apply.

 

	Worldwide
    Annual Net Sales	 	Amount
	$50M	 	$2,000,000
	$100M	 	$4,000,000
	$250M	 	$10,000,000
	$500M	 	$20,000,000
	$1 Billion	 	$40,000,000

 

6.8
Product Royalties.

 

(a)
Royalty Rate. Processa shall pay to Elion royalties, on a Product-by-Product and country-by-country basis, equal to 9%
of Net Sales of Products in the Territory during each Calendar Quarter during the applicable Royalty Term for the aggregate Worldwide
Annual Net Sales in the Territory, subject to adjustment as provided in this Section 6.8. Upon the expiration of the Royalty Term
with respect to each Product in each country, Processa shall have a fully-paid up irrevocable license with respect to such Product
in such country. Notwithstanding anything to the contrary contained herein, in no event shall the royalty reductions described
in this Section 6.8, alone or together, reduce the royalties payable to Elion below 4.5% of Net Sales for a Product in a country
in any given Calendar Quarter; it being understood and agreed that Processa may carry over and apply any such royalty reductions,
which are incurred or accrued in a Calendar Quarter and are not deducted in such Calendar Quarter due to the limitation set forth
above in this 6.8(a), to any subsequent Calendar Quarter(s) and shall continue applying such reduction on a Calendar Quarter basis
thereafter until fully deducted, in all cases subject to the limitation set forth in this sentence.

 

(b)
Royalty Term and Adjustments. Processa’s royalty obligations to Elion under this Section 6.8 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 latest of (i) expiration or invalidation of the last Valid Claim Covering such Product in such country and (ii) the
tenth (10th) anniversary of the date of the First Commercial Sale by Processa or any of its Affiliates or Sublicensees
to a non-Sublicensee Third Party of such Product in such country and (iii) the expiration of the last Regulatory Exclusivity relating
to 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 6.8 shall be reduced
to 4.5% of Net Sales for such Product in such country pursuant to Section 6.8.

 

    	 	18	 

     

    

 

(c)
Third Party Payments. If, in the opinion of patent counsel mutually acceptable to both Processa and Elion, 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 Elion 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 6.8, forty percent (40%) of such royalties actually paid by Processa, its Affiliates
or Sublicensees shall be creditable against royalties payable to Elion hereunder with respect to such Product in such country;
provided that, 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.

 

6.9
Sublicense. Subject to the examples provided below, if (a) Processa sub-licenses all rights to the Product in any country
in the Territory to a Third Party, Elion shall receive thirty-three percent (33%) of any Sublicense Consideration including Development
and Regulatory Milestones (Section 6.4 and 6.5), Sales Milestones (Section 6.7) and Product Royalties (Section 6.8); and (b) notwithstanding
the foregoing, in the event that Processa receives Sublicense Consideration on account of a specific Product, then in such case
Processa shall be required to pay Elion thirty-three percent (33%) of all Sublicense Consideration within thirty (30) days of
receipt, but shall not be required to pay Development and Regulatory Milestone Payment (Section 6.4 and 6.5) or Sales Milestone
Payment (Section 6.7) or Product Royalties (Section 6.8) on account of such specific Product in addition to the Sublicense Payments.
To clarify, three example scenarios are presented:

 

Example
1: If Processa Develops the Product and receives Regulatory Approval in multiple countries in the Territory and licenses out the
commercial sales to Sublicensee in these multiple countries in the Territory such that Processa no longer retains any rights to
commercialize the Product in these multiple countries in the Territory, then the financial terms of this ARTICLE VI would then
be the following: Sections 6.4 - 6.5 would apply, Sections 6.7 - 6.8 would no longer apply, and this Section 6.9 would apply such
that Processa shall pay Elion thirty-three percent (33%) of all Sublicense Consideration.

 

Example
2: If Processa Develops and Commercializes the Product in US while Sublicensing the Product for Development and Commercialization
in other territories, then the financial terms of ARTICLE VI would then be the following: Sections 6.4 - 6.5 would apply, Sections
6.7 - 6.8 would only apply to the countries in the Territory in which Processa Commercializes the Product, and this Section 6.9
would apply such that Processa shall pay Elion thirty-three percent (33%) of all Sublicense Consideration.

 

    	 	19	 

     

    

 

Example
3: If Processa sublicenses the Product prior to Phase 3 trial prior to any Regulatory Approval of the Product and Sublicensee
completes Development, obtains Regulatory Approval, and Commercializes the Product, then the financial terms of ARTICLE VI would
then be the following: for Sections 6.4 – 6.5 Processa would pay for milestones that it has completed, the remaining milestones
of Section 6.4 – 6.5 not completed by Processa would no longer apply, Sections 6.7 – 6.8 would not apply, and this
Section 6.9 would apply such that Processa shall pay Elion thirty-three percent (33%) of all Sublicense Consideration.

 

“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 and equity and other securities (including earnouts and contingent value rights
and other comparable deferred payment mechanisms), 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: (a) Net Sales or (b) amounts expressly dedicated to,
and actually expended upon to reimburse Processa and its Affiliates, following any such sublicense, for, the Development of Products,
up to the actual costs incurred by Processa and its Affiliates for such activities. Processa shall pay Elion the sublicense fee
within thirty (30) days after the receipt of the Sublicense Consideration.

 

6.10
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
Elion 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 Elion 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 and milestone payments owed to Elion, listed by category, (vi) Sublicense Consideration received
during the preceding Calendar Quarter and sublicense fees due to Elion, (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 commercial milestone,
and an estimate of the timing of the achievement of the next development and commercial milestone. Once the events set forth in
sub-section (a) or (b), above, have occurred, Periodic Reports shall be provided to Elion whether or not royalties, milestone
payments or sublicense fees are payable for a particular Calendar Quarter. In addition to the foregoing, upon Elion’s reasonable
request, Processa will provide to Elion such other information as may be reasonably requested by Elion, and will otherwise cooperate
with Elion as reasonably necessary, to enable Elion to verify Processa’s compliance with the payment and related obligations
under this Agreement, including verification of the calculation of amounts due to Elion 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 Elion all amounts payable by it under Sections 6.4, 6.7, 6.8 and 6.9.

 

    	 	20	 

     

    

 

6.11
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 6.4, 6.7, 6.8 and 6.9. Elion shall have the right, once
annually at its own expense, to have an independent, certified public accounting firm, selected by Elion 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 6.4, 6.7, 6.8 and 6.9 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, milestone payments, Sublicense Consideration and royalties due, for such period. Processa
shall receive a copy of each such report concurrently with receipt by Elion. Should such inspection lead to the discovery of a
discrepancy to Elion’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 ‎6.15. Elion shall
pay the full cost of the review unless the underpayment of royalties 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.

 

6.12
Tax Matters. All payments to be made to Elion by Processa hereunder shall be reduced by or on account of any taxes, levies,
imposts, duties, charges, value added taxes (“VAT”), assessments or fees (collectively, “Taxes”)
that are required by any applicable Law (with due regard to any relief to which Elion may be entitled) that Taxes be deducted
and withheld from any payment made to Elion by Processa under this Agreement. If any such applicable Law requires (with due regard
to any relief to which Elion may be entitled) that Taxes be deducted and withheld from any payment made to Elion 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 Elion promptly following such payment; and (d) remit to Elion the net amount of such payment remaining after the payment of
such Taxes. In determining whether to deduct any amount hereunder and prior to making such deduction, Processa shall contact Elion
and reasonably consider the documentation supplied by Elion, 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 Elion in
respect of Tax matters relating to payments made by Processa to Elion under this Agreement and any disputes with a Governmental
Authority regarding such matters (at Elion’s sole cost and expense), including without limitation: (y) complying with reasonable
requests from Elion to change the form, place or other circumstances of payments to be made to Elion 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 Elion); and (z) in connection with any official or unofficial audit or contest relating to such payments. Notwithstanding
anything in this Agreement to the contrary, if any failure to comply with applicable Laws or filing or record retention requirements
by a Party leads to the imposition of withholding Tax liability or VAT on the other Party that would not have been imposed in
the absence of such action or in an increase in such liability above the liability that would have been imposed in the absence
of such action, then (i) the sum payable by that Party (in respect of which such deduction or withholding is required to be made)
shall be increased to the extent necessary to ensure that the other Party receives a sum equal to the sum which it would have
received had no such action occurred, and (ii) otherwise, the sum payable by that Party (in respect of which such deduction or
withholding is required to be made) shall be made to the other Party after deduction of the amount required to be so deducted
or withheld, which deducted or withheld amount shall be remitted in accordance with applicable Law.

 

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6.13
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 Elion’s bank account, or to such other bank account as Elion 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 or other payments due for the relevant
Calendar Quarter under this Agreement, the amount of Net Sales in any foreign currency shall be converted into U.S. dollars in
accordance with the prevailing rates of exchange for the relevant month for converting such first currency into such other currency
used by Processa’s (or its Sublicensee’s) internal accounting systems, which are independently audited on an annual
basis. Upon request by Elion, Processa shall disclose the bases for the rates of exchange used for purposes of assuring that such
rates reflect prevailing rates of exchange.

 

6.14
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 Elion
or to Processa or its Affiliates or Sublicensees, Processa shall promptly notify Elion of the conditions preventing such transfer.
To the extent any payments to Elion cannot be transferred pursuant to the preceding sentence, such amounts shall be deposited
in local currency in the relevant country to the credit of Elion in a recognized banking institution designated by Elion or, if
none is designated by Elion 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 Elion. If so deposited in a foreign country,
Processa shall provide, or cause its Affiliate or Sublicensee to provide, reasonable cooperation to Elion so as to allow Elion
to assume control over such deposit as promptly as practicable.

 

6.15
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 an annual rate equal to the “prime
rate”, as reported by The Wall Street Journal, plus five percent (5%).

 

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ARTICLE
VII

INTELLECTUAL PROPERTY OWNERSHIP, PROTECTION

AND RELATED MATTERS

 

7.1
Ownership of Inventions.

 

(a)
Sole Inventions. Each Party shall exclusively own all inventions relating to any Compound or Product or its manufacture
or use made solely by such Party, its employees, agents, and consultants (“Sole Inventions”). Sole Inventions
made solely by Processa, its employees, agents and consultants are referred to herein as “Processa Sole Inventions”.
Sole Inventions made solely by Elion, its employees, agents and consultants are referred to herein as “Elion Sole Inventions”.
For clarity, products Covered by Processa Sole Inventions shall be deemed Products for the purpose of this Agreement.

 

(b)
Joint Inventions. The Parties shall jointly own all inventions relating to any Compound or Product or its manufacture or
use made jointly by employees, agents and consultants of Processa, on the one hand, and employees, agents and consultants of Elion,
on the other hand, 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, an Elion Sole Invention or
a Joint Invention, questions of inventorship shall be resolved in accordance with United States patent Laws.

 

7.2
Prosecution and Maintenance of Patent Rights.

 

(a)
Prosecution of Elion Patent Rights. With respect to Elion Patent Rights, Elion and Processa shall cooperate in good faith
in connection with the continued prosecution and maintenance by Elion of such Elion Patent Rights. If Processa satisfies the Condition
Precedent pursuant to Section ‎2.1, the out-of-pocket costs and expenses incurred by Elion after the Condition Precedent Satisfaction
Date to obtain, prosecute and maintain Elion Patent Rights shall be borne one hundred percent (100%) by Processa. Elion shall
notify Processa at least ninety (90) days prior to the deadline for entering into national phase with respect to any PCT application
included in Elion Patent Rights. No later than sixty (60) days prior to entry into national phase, Processa shall provide Elion
with a list of any countries in which Processa would like Elion to file. Elion shall file international patent applications, or
designate for national filing and file, in all countries requested by Processa. Elion shall promptly deliver to Processa copies
of all official correspondence with the applicable patent and trademark offices in the Territory relating to the Elion Patent
Rights and, after the Condition Precedent Satisfaction Date shall promptly provide Processa drafts of all proposed material filings
and correspondence to any patent authority with respect to the Elion Patent Rights for Processa’s review and comment prior
to the submission of such proposed filings and correspondences. Elion shall keep Processa informed of the status of all pending
patent applications that pertain to any Compound or Product. Elion, its agents and attorneys shall not unreasonably decline to
implement or incorporate any comments of Processa regarding any aspect of such patent prosecutions. Elion shall not abandon any
Elion Patent Rights (the “Abandoned Patents”) without at least ninety (90) days’ prior notice to Processa.
If Elion decides to abandon any Elion Patent Rights, Processa shall have the option to continue to prosecute and maintain the
Abandoned Patents in Elion’s name.

 

    	 	23	 

     

    

 

(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, Covering Joint Inventions (“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 keep Elion 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 Elion regarding any aspect of
such patent prosecutions. Processa shall not abandon any Joint Patent Right without at least ninety (90) days’ prior notice
to Elion. If Processa decides to abandon any Joint Patent Right, Elion shall have the option to continue to prosecute and maintain
such Joint Patent Right jointly in both Parties’ names, at Elion’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 Elion informed of the status of all pending Processa Patent Rights. Processa,
its agents and attorneys shall not unreasonably decline to implement or incorporate any comments of Elion regarding any aspect
of such patent prosecutions. Processa shall not abandon any Processa Patent Right without at least ninety (90) days’ prior
notice to Elion. If Processa decides to abandon any Processa Patent Right, Elion shall have the option to continue to prosecute
and maintain such Processa Patent Right jointly in both Parties’ names, at Elion’s sole expense.

 

(d)
Cooperation. Each Party agrees to cooperate fully in the preparation, filing, prosecution, and maintenance of Elion Patent
Rights, Joint Patent Rights, and Processa Patent Rights, pursuant to this Section ‎7.2 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 ‎7.2; 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.

 

7.3
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 Elion Patent Rights, Processa Patent Rights or Joint Patent Rights, or (ii) unauthorized use or misappropriation
of any of the Elion Know-How, Processa Sole Invention or Joint Inventions, in the case of either clause (i) or clause (ii), that
would reasonably be expected to adversely impact the (A) Development, Manufacture, use or Commercialization of a Compound or Product
in the Field in the Territory, or (B) the valid scope of the rights licensed to Processa 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.

 

    	 	24	 

     

    

 

(b)
Initial Right to Enforce. Subject to Section ‎7.3(c), 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 Processa Intellectual Property, Elion Intellectual Property and Joint Intellectual Property with respect to an Infringement
Claim; provided, however, that Processa shall (i) consult with Elion in good faith with respect to any claim that
any Elion Patent Right, Processa Patent Right or Joint Patent Right is invalid or unenforceable and (ii) implement any reasonable
comment from Elion regarding any aspect of defending against any such claim described in clause (i). Any such suit by Processa
shall be brought either in the name of Elion or its Affiliate, the name of Processa or its Affiliate, or the names of Processa,
Elion and their respective Affiliates, as may be required by the Law of the forum. For this purpose, Elion 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 Elion in connection with such cooperation. For clarity, as between Elion and Processa, (A) Elion shall have the sole right,
but not the obligation, to protect Elion 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 VII shall not apply with respect thereto.

 

(c)
Step-In Right. 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 ‎7.3(b), then Elion may, in its discretion, provide Processa
with notice of Elion’s intent to initiate a suit or take other appropriate action. If Elion 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 Elion,
then Elion 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, Elion Intellectual Property and Joint Intellectual Property. Any suit by Elion shall
be either in the name of Elion or its Affiliate, the name of Processa or its Affiliate, or the names of Processa, Elion, 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 Elion in connection with such suit, as may be reasonably requested by Elion; provided that Elion shall promptly
reimburse all out-of-pocket expenses (including reasonable counsel fees and expenses) actually incurred by Processa in connection
with such cooperation.

 

(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 ‎7.3(b) or ‎7.3(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 ‎7.3(b) and ‎7.3(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.

 

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(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; and

 

(ii)
second, if Processa controlled the defense of the Infringement Claim any remaining amount shall be shared by the Parties, with
Processa retaining 75% of such remaining amount and Elion retaining 25% of such remaining amount. If Elion controlled the defense
of the Infringement Claim any remaining amount following reimbursement of expenses under clause (i) shall be retained by Elion.

 

7.4
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 an Elion Patent Right, Processa Patent Right or Joint Patent Right of which it becomes aware,
including any nullity, revocation, reexamination or compulsory license proceeding. Elion shall have the first right, but not the
obligation, to defend against any such action involving an Elion Patent Right, and the costs of any such defense shall be at Elion’s
expense; provided, however, that, in the case of any inter partes review or similar post-grant matter before
the Patent Trial and Appeal Board or similar administrative body that is based on the same subject matter as any claim or counterclaim
in any Infringement Claim or Paragraph IV Claim, Processa shall have the first right, but not the obligation, to defend against
any such action involving an Elion Patent Right, and the costs of any such defense shall be at Processa’s expense. Processa
shall have the first right, but not the obligation, to defend against any such action involving a Processa Patent Right or Joint
Patent Right, and the costs of any such defense shall be at Processa’s expense. If the Party that has the first right to
defend against any such action involving such Elion Patent Right, Processa Patent Right or Joint Patent Right does not do so,
then the other Party shall have the right, but not the obligation, to defend such action and any such defense shall be at such
other Party’s expense. Upon request of the Party that defends against any such action involving an Elion 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.

 

7.5
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 Elion 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.

 

    	 	26	 

     

    

 

7.6
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. Elion 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 Elion regarding any such activities; provided
that all final decisions shall be made by Processa.

 

7.7
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.

 

7.8
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 in the Territory other than the U.S., claiming that any Elion
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.

 

(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 Elion
in good faith with respect to any claim that any Elion Patent Right, Processa Patent Right or Joint Patent Right is invalid or
unenforceable and (ii) implement any comment from Elion regarding any aspect of defending against any such claim. Any suit by
Processa shall be brought either in the name of Elion or its Affiliate, the name of Processa or its Affiliate, or the names of
Processa, Elion, and their respective Affiliates, as may be required by the Law of the forum. For this purpose, Elion 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 Elion in connection with such cooperation. If Processa
elects not to assume control over litigating any Paragraph IV Claim, Processa shall notify Elion 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 Elion 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 Elion shall be either in the name of Elion or its Affiliate, the name of Processa or its Affiliate, or the names of Processa,
Elion, 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 Elion; provided that Elion 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 ‎7.3(e) above.

 

    	 	27	 

     

    

 

7.9
Privileged Communications. In furtherance of this Agreement, it is expected that Processa and Elion 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 Elion and Processa, including the community of
legal interests in avoiding infringement of any valid, enforceable patents of Third Parties and maintaining the validity of Elion
Patent Rights, Processa Patent Rights and Joint Patent Rights.

 

7.10
Settlement. Neither Party shall unilaterally enter into any settlement or compromise of any suit, action or proceeding
under this ‎ARTICLE VII 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.

 

ARTICLE
VIII

CONFIDENTIAL INFORMATION

 

8.1
Treatment of Confidential Information. During the Term and for five (5) years thereafter, each Party shall maintain Confidential
Information (as defined in Section ‎8.2) 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 advisors 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 VIII) 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 VIII 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 ‎8.1(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 ‎8.1(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 ‎8.1(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 VIII.

 

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8.2
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. 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.

 

8.3
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 Elion
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 Elion 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. Elion 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 Elion, 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 Elion. In addition, Processa will consider in good faith
any comments furnished by Elion 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 Elion. Elion 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 Elion
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. Elion 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 Elion making such
publications, Elion 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.

 

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8.4
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 VIII). 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 ‎8.4, then either Party may appropriately communicate
information contained in such permitted statement or disclosure. Notwithstanding the foregoing provisions of this Section ‎8.4
this ‎ARTICLE VIII, 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 VIII 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.

 

8.5
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 VIII. 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 VIII.

 

    	 	30	 

     

    

 

ARTICLE
IX

REPRESENTATIONS, WARRANTIES AND COVENANTS

 

9.1
Elion’s Representations. Elion hereby represents and warrants as of the Effective Date as follows:

 

(a)
Elion 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 Elion. Elion 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 Elion, enforceable against Elion in accordance with its terms.

 

(b)
The execution and delivery of this Agreement by Elion do not require Elion 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 Elion 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 Elion may be a party that relates to the Elion Patent
Rights or the Elion Know-How.

 

(c)
Schedule ‎1.16 is a complete and correct list of all Patent Rights owned by Elion as of the Effective Date that Cover
any Compound or Product. No Patent Right that covers any Compound or Product has been licensed to Elion.

 

(d)
Elion is the legal and beneficial owner of all the Patent Rights identified on Schedule ‎1.16, free and clear of any
liens, mortgages, security interests or other similar encumbrances. All assignments to Elion of ownership rights relating to such
Patent Rights are valid and enforceable. All of the Patent Rights listed identified on Schedule ‎1.16 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 ‎1.16 have been timely paid. Elion 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 Elion 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 Elion’s knowledge, threatened
against Elion in connection with the Compounds or Products or any Elion Patent Rights, Elion Know-How or against or relating to
the transactions contemplated by this Agreement. Elion has not received any written notice from a Third Party that the Development
of any Compound or Product conducted by Elion has infringed, or that any Development or Commercialization of any Compound or Product
will infringe, any Patent Rights of any Third Party.

 

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

 

(g)
Neither Elion nor, to the knowledge of Elion, 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.

 

(h)
The shares of Common Stock of Processa that may be issued under this Agreement shall be acquired for investment for Elion’s
own account (or that of its permitted designee), 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, Elion (or, if applicable, its permitted designee) has no present intention of
selling, granting any participation or otherwise distributing the shares. Elion, either alone or together with its Affiliates
and 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. Elion (or, if applicable, its permitted designee) 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. Elion (or, if applicable, its permitted designee)
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 Processa, or (b) any
seminar or meeting whose attendees, including Elion, have been invited by any general solicitation or general advertising related
to Processa.

 

(i)
Elion (or, if applicable, its permitted designee) 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 of 1933, as amended.

 

(j)
Elion (or, if applicable, its permitted designee) acknowledges that it has had the opportunity to review the reports filed by
Processa with the SEC and has been afforded, (i) the opportunity to ask such questions as it has deemed necessary of, and to receive
answers from, representatives of Processa concerning the terms and conditions of the offering of the shares of Common Stock hereby
and the merits and risks of investing in the shares; (ii) access to information about Processa 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 Processa possesses or can acquire without unreasonable effort or expense
that is necessary to make an informed investment decision with respect to the investment.

 

    	 	32	 

     

    

 

9.2
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 Elion, this Agreement
constitutes a legal, valid, and binding obligation of Processa, enforceable against Processa in accordance with its terms.

 

(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.

 

9.3
Elion Covenants. Elion covenants and agrees during the Term that, subject to Processa’s, its Affiliates’ and
Sublicensees’ performance of their obligations under this Agreement:

 

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

 

(b)
Subject to Section ‎12.7, Elion shall not assign, transfer, convey, or otherwise encumber its right, title, and interest in
the Elion Intellectual Property in a manner that conflicts with any rights granted to Processa hereunder.

 

    	 	33	 

     

    

 

9.4
Processa Covenant.

 

(a)
Processa shall conduct, and shall use Commercially Reasonable Efforts to 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 ‎12.7, 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 Elion upon termination.

 

9.5
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
X

INDEMNIFICATION

 

10.1
Indemnification in Favor of Elion. Processa shall indemnify, defend and hold harmless the Elion Parties from and against
any and all Losses incurred, suffered or sustained by any of the Elion Parties or to which any of the Elion 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 Elion 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 X, “Elion Parties” means Elion, its Affiliates and their respective agents, directors,
officers, licensees, sublicensees and employees.

 

    	 	34	 

     

    

 

The
indemnification obligations set forth in this Section ‎10.1 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 Elion in this Agreement or (ii) the gross negligence
or willful misconduct of any applicable Elion Party.

 

10.2
Indemnification in Favor of Processa. Elion 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 Elion in this Agreement; or

 

(b)
the Development, Manufacture or Commercialization of Compounds or Products by Elion, 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 Elion, 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 Elion, 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 Elion Parties in connection with Elion’s performance of this Agreement;
or

 

(e)
the formation of the Trust, issuance of the shares of Common Stock to the Trust for the benefit of Elion as provided in Section
6.1 or as a result of the shares of Common Stock being held in such Trust.

 

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

 

The
indemnification obligations set forth in this Section ‎10.2 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.

 

    	 	35	 

     

    

 

10.3
General Indemnification Procedures.

 

(a)
An Elion Party or Processa Party seeking indemnification pursuant to this ‎ARTICLE X (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 will have the right, exercisable by notice to the Indemnified
Party within ten Business Days after receipt of notice from the Indemnified Party of the commencement of or assertion of any Third
Party Claim, to assume direction and control of the defense, litigation, settlement, appeal or other disposition of the Third
Party Claim (including the right to settle the claim solely for monetary consideration) with counsel selected by the Indemnifying
Party and reasonably acceptable to the Indemnified Party; provided that (a) the Indemnifying Party has sufficient financial resources,
in the reasonable judgment of the Indemnified Party, to satisfy the amount of any adverse monetary judgment that is sought, (b)
the Third Party Claim seeks solely monetary damages and (c) the Indemnifying Party expressly agrees in writing that as between
the Indemnifying Party and the Indemnified Party, the Indemnifying Party will be solely obligated to satisfy and discharge the
Third Party Claim in full (the conditions set forth in clauses (a), (b) and (c) above are collectively referred to as the “Litigation
Conditions”). Within ten Business Days after the Indemnifying Party has given notice to the Indemnified Party of its
exercise of its right to defend a Third Party Claim, the Indemnified Party will give notice to the Indemnifying Party of any objection
thereto based upon the Litigation Conditions. If the Indemnified Party reasonably so objects, the Indemnified Party will continue
to defend the Third Party Claim, at the expense of the Indemnifying Party, until such time as such objection is withdrawn. If
no such notice is given, or if any such objection is withdrawn, the Indemnifying Party will be entitled, at its sole cost and
expense, to assume direction and control of such defense, with counsel selected by the Indemnifying Party and reasonably acceptable
to the Indemnified Party. During such time as the Indemnifying Party is controlling the defense of such Third Party Claim, the
Indemnified Party will cooperate, and will cause its Affiliates and agents to cooperate upon request of the Indemnifying Party,
in the defense or prosecution of the Third Party Claim, including by furnishing such records, information and testimony and attending
such conferences, discovery proceedings, hearings, trials or appeals as may reasonably be requested by the Indemnifying Party.
In the event that the Indemnifying Party does not satisfy the Litigation Conditions or does not notify the Indemnified Party of
the Indemnifying Party’s intent to defend any Third Party Claim within ten Business Days after notice thereof, the Indemnified
Party may (without further notice to the Indemnifying Party) undertake the defense thereof with counsel of its choice and at the
Indemnifying Party’s expense (including reasonable, out-of-pocket attorneys’ fees and costs and expenses of enforcement
or defense). The Indemnifying Party or the Indemnified Party, as the case may be, will have the right to join in (including the
right to conduct discovery, interview and examine witnesses and participate in all settlement conferences), but not control, at
its own expense, the defense of any Third Party Claim that the other party is defending as provided in this Agreement.

 

(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.

 

    	 	36	 

     

    

 

(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 X, 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 X 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 X.

 

10.4
Insurance. During the Term, if the Condition Precedent is satisfied, and thereafter for so long as a Third Party Claim
may be brought for which Processa must indemnify Elion pursuant to Section ‎10.1, 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 Elion upon the request of Elion prior to the Condition Precedent Satisfaction Date
and, upon the written request of Elion, concurrent with any renewal or replacement of such coverage.

 

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ARTICLE
XI

TERM AND TERMINATION

 

11.1
Term. The term of this Agreement (the “Term”) shall commence on the Effective Date and, unless earlier
terminated as provided in this ‎ARTICLE XI, shall continue in full force and effect until the expiration of the last Royalty
Term. 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 license under the Elion Intellectual Property and
Elion’s interest in the Joint Intellectual Property with respect to such Product in such country.

 

11.2
Termination for Failure to Satisfy Condition Precedent. If, for any reason (including a failure to meet the conditions
in Section 2.1 prior to end of the Condition Precedent Period), the Condition Precedent is not fully satisfied within the Condition
Precedent Period, then this Agreement shall automatically terminate in its entirety on the day after the last day of the Condition
Precedent Period.

 

11.3
Termination for Convenience. Processa shall have the right upon sixty (60) days prior written notice to Elion to terminate
this Agreement in its entirety for any reason.

 

11.4
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 ninety (90) 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 ‎11.4 shall not be affected in any way by its waiver of, or failure to take action
with respect to, any previous default.

 

11.5
Additional Termination by Elion. In the event that Elion has provided written notice to Processa pursuant to Section ‎5.2,
if (a) Processa does not respond to Elion in writing within sixty (60) days of receipt of such notice from Elion and reasonably
demonstrate in such response compliance with Processa’s obligations under Section ‎5.1, or (b) Processa has failed to
comply with Section 5.1 (a) or Section 5.1(b), Elion shall be entitled (without prejudice to any other rights conferred on it
by this Agreement or under applicable Law) to terminate this Agreement with immediate effect by giving written notice to Processa.

 

    	 	38	 

     

    

 

11.6
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 a general 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.

 

11.7
Termination for Challenge of Elion Patent Rights. If Processa or any of Processa’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 Elion Patent Rights, or any of the claims thereof, or supports or assists any Third Party that commences
such an action in any such court or tribunal, Elion shall have the right to terminate this Agreement upon notice to Processa;
provided, however, that Elion shall not have a right to terminate if the challenge is brought by a Sublicensee,
either directly or indirectly through any Third Party, and Processa 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.

 

11.8
Consequences of Termination. If this Agreement (w) terminates automatically pursuant to Section ‎11.2, (x) is terminated
by Elion under Section ‎11.4, ‎11.5, ‎11.6 or ‎11.7, (y) is terminated by Processa under Section ‎11.3, or
(z) is terminated by Processa under Section ‎11.4 or ‎11.6, then the licenses granted to Processa in Section ‎2.2
and, except as provided in this Section ‎11.8 and Sections ‎11.9 and ‎11.10 (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 (w), (y) or (z)) of this Section ‎11.8, clause (a) shall apply, and, upon a termination described
in clause (w), (x) or (y) (but not clause (z)), Processa shall grant, and shall cause any applicable Affiliate to grant, Elion
any combination of the following clauses (b) through (f) elected by Elion, provided that (i) upon a termination described in clause
(w), only clause (c) and, to the extent that any Processa Intellectual Property, Sublicensee Intellectual Property or Joint Intellectual
Property exists as of such termination, clause (e) shall apply, and (ii) Processa shall only be required to grant Elion rights
to Sublicensee Materials under the applicable sublicense agreement(s) with Sublicensee(s) to whom Elion has not granted a direct
license pursuant to Section l1.8(a):

 

(a)
Sublicenses. Elion hereby grants, effective automatically upon any termination of this Agreement by Elion pursuant to Section
‎11.4, ‎11.5, ‎11.6 or ‎11.7, 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 V and all payments
to Elion required under Section 6, from and after the date that such direct license becomes effective.

 

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(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 Elion;

 

(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 Elion’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 Elion’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 Elion, 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 Elion 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 Elion for any reason, Processa will discuss in good faith with Elion terms upon which Processa
and its Affiliates and applicable Sublicensees shall use Commercially Reasonable Efforts to provide Elion 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 Elion 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 Elion pursuant to the assignment
of agreements pursuant to paragraph (i) above, and (B) cooperation with Elion to provide Elion 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 Elion 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 Elion to provide Elion 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 Elion; provided that Elion 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 Elion pursuant to the assignment of agreements pursuant to paragraph (i) above; and

 

    	 	40	 

     

    

 

(iv)
sale of Processa’s or its Affiliates’ or applicable Sublicensees’ then-existing inventory of Compounds and Products
to Elion, 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 Elion’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 Elion’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 Elion
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 Elion 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 Elion 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 Elion shall execute such documentation reasonably satisfactory to
Processa to effectuate such agreement; and if the license granted to Elion is exclusive, Elion 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 Elion pursuant to this Section ‎11.8‎(e) as Processa has with respect to Infringement
Claims pursuant to Section 7.3 (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 Elion 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 Elion 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.

 

    	 	41	 

     

    

 

11.9
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 VI) 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.

 

11.10
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
‎2.3, ‎2.4, ‎6.11 (only for thirty-six (36) months after expiration or termination), ‎6.121, ‎6.132, ‎6.143,
‎6.15, ‎7.1, ‎7.9, ‎8.1, ‎8.2, ‎8.5, ‎9.5, ‎ARTICLE X, and Sections ‎11.1 (last sentence as
to any such license that became perpetual and irrevocable prior to expiration or termination), ‎11.8, ‎11.9, ‎11.10
and ‎ARTICLE XII shall survive expiration or termination of this Agreement for any reason.

 

ARTICLE
XII

MISCELLANEOUS

 

12.1
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 City, 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.

 

12.2
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 ‎12.1.

 

    	 	42	 

     

    

 

12.3
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.

 

12.4
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 ‎12.4 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 Elion shall be addressed to:

 

Elion
Oncology, Inc.

4800 Hampden Lane

Bethesda, MD 20814

Attn: Chief Executive Offer

 

With
a copy to:

 

Dechert
LLP

1900 K Street, NW

Washington, DC 20006

Attn: David E. Schulman

 

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

 

    	 	43	 

     

    

 

12.5
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.

 

12.6
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.

 

12.7
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 and the assignor confirms to the non-assigning party that it shall remain liable as if
no such liability had occurred; 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 ‎12.7 shall be void. Subject
to this Section 12.7, any permitted assignee shall assume all obligations of its assignor under this Agreement.

 

12.8
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.

 

12.9
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 natural disaster, explosion, fire,
flood, tornadoes, pandemic, quarantine, 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.

 

    	 	44	 

     

    

 

12.10
Third-Party Beneficiaries. None of the provisions of this Agreement shall be for the benefit of or enforceable by any Third
Party other than an Elion Party or a Processa Party, as applicable, that is an Indemnified Party under ‎ARTICLE X, 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.

 

12.11
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.

 

12.12
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.

 

12.13
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 ‎12.13 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]

 

    	 	45	 

     

    

 

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

 

	PROCESSA
    PHARMACEUTICALS, INC.	 	ELION
    ONCOLOGY, INC.
			 		
	By:		 	By:	
	Name:	David
    Young	 	Name:	R.
    Michael Floyd
	Title:	CEO	 	Title:	Chief
    Executive Officer

 

    	 	46	 

     

    

 

	Schedule
    1.12	 	Current
    as of August 23, 2020

 

Issued:

 

	●	U.S.
    Patent - 8,658,618; Granted 2014: Methods for preventing or reducing neurotoxicity associated with administering DPD inhibitors
    in  combination with 5-FU and 5-FU prodrugs. 
	 	 
	●	US
    Patent - 8,318,756; Granted 2012: Methods for administering DPD inhibitors in combination with 5-FU and 5-FU prodrugs. 
	 	 
	●	Orphan
    Drug Designation for Eniluracil in Hepatocelluar Carcinomas; Granted in 2005: ADH300004 (ENILURACIL) IN COMBINATION WITH FLUOROPYRIMIDINES
    FOR THE TREATMENT OF  PATIENTS WITH HEPATOCELLULAR CARCINOMA

 

Filed:

 

	●	Formulation
    patents on formulation of Extended Release Colon Targeted delivery of drugs (May 2018) and ERCT5-FU and Use with Eniluracil
    (July 2018) 

 

To
Be Filed Patents:

 

	●	Draftsm
    pending patents of all other Eniluarcil and DPD related patents. 

 

    	1

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