Document:

pledge
agreement

 

This
Pledge Agreement (the “Pledge Agreement”), dated May 25, 2018, is by and between PoC Capital, LLC, a California
limited liability company (the “Pledgor”) and Processa Pharmaceuticals, Inc., a Delaware corporation (the “Secured
Party”).

 

RECITALS

 

WHEREAS,
pursuant to an agreement dated May 25, 2018 by and between the Pledgor and the Secured Party (the “Agreement”),
the Pledgor has agreed to fund $1,800,000 in clinical trials for the Secured Party in exchange for the Secured Party issuing 792,952
shares of the Secured Party’s common stock and warrants to purchase 792,952 shares of the Secured Party’s common stock;
and

 

WHEREAS,
the Pledgor and the Secured Party desire to have the Pledgor grant to the Secured Party a security interest in the Pledged Collateral
(as defined below) to secure the payment of the Obligations (as defined below).

 

AGREEMENT

 

NOW,
THEREFORE, in consideration of the premises and other good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the Pledgor and the Secured Party hereby agree as follows:

 

Article
I

Securing
Interest and Pledge

 

Section
1.01 Security Interest and Pledge. The Pledgor hereby pledges to the Secured Party, and grants to the Secured Party, a
security interest in 396,476 shares of the Secured Party’s common stock (the “Pledged Shares”) and the
certificate representing the Pledged Shares, and all dividends, cash, instruments and other property from time to time received,
receivable or otherwise distributed in respect of or in exchange for any or all of the Pledged Shares, and a security interest
in warrants to purchase 396,476 shares of the Secured Party’s common stock (the “Pledged Warrants”) and
the certificate representing the Pledged Warrants (collectively, the “Pledged Collateral”).

 

Section
1.02 Security for Obligations. This Pledge Agreement secures the payment of all obligations and liabilities of the Pledgor
now or hereafter existing under the Agreement (including, but not limited to, expenses incurred by the Secured Party to preserve
and maintain the Pledged Collateral, collect any of the obligations herein described or enforce this Pledge Agreement) or otherwise,
and all obligations of the Pledgor now or hereafter existing under this Pledge Agreement (all such obligations of the Pledgor
being herein referred to as the “Obligations”).

 

    	 	 	 

    	 

    

 

Article
II

Representations
and Warranties

 

The
Pledgor represents and warrants to the Secured Party that:

 

Section
2.01 Title. The Pledgor is the legal and beneficial owner of the Pledged Collateral, free and clear of any lien, security
interest (other than the security interest granted herein), option or other charge or encumbrance.

 

Section
2.02 Authorized Pledge. The Pledgor’s execution and delivery of, and performance of its obligations under, this Pledge
Agreement does not contravene any law or contractual restriction binding on or affecting either the Pledged Collateral or the
Pledgor. Further, no authorization, approval or other action by, and no notice to or filing with, any governmental authority or
regulatory body is required for either (a) the pledge of the Pledged Collateral pursuant to this Pledge Agreement, (b) the execution,
delivery or performance of this Pledge Agreement by the Pledgor, or (c) the Secured Party’s exercise of the voting or other
rights provided for in this Pledge Agreement or the remedies in respect of the Pledged Collateral pursuant to this Pledge Agreement
(except in connection with such disposition by laws affecting the offering and sale of securities generally).

 

Section
2.03 Legal, Valid and Binding Obligation. This Pledge Agreement is enforceable in accordance with its terms and is the
legal, valid and binding obligation of the Pledgor and is enforceable against the Pledgor in accordance with its terms.

 

Section
2.04 First Priority Perfected Security Interest. The pledge of the Pledged Collateral pursuant to this Pledge Agreement
creates a valid and perfected first lien security interest in the Pledged Collateral, securing the payment and performance of
the Obligations.

 

Article
III

Affirmative
and Negative Covenants

 

The
Pledgor covenants and agrees as follows:

 

Section
3.01 Delivery of the Pledged Collateral. All certificates or instruments representing or evidencing the Pledged Collateral
are hereby, or shall be at the Secured Party’s request, delivered to the Secured Party and are either in suitable form for
transfer by delivery, or are accompanied by instruments of transfer or assignment duly executed in blank, all in form and substance
satisfactory to the Secured Party.

 

Section
3.02 Transfers and Other Liens. Without the prior written consent of the Secured Party, the Pledgor shall not (a) sell
or otherwise dispose of, or grant any option with respect to, any of the Pledged Collateral, or (b) create or permit to exist
any lien, security interest or other charge or encumbrance upon or with respect to any of the Pledged Collateral, except for the
security interest granted under this Pledge Agreement.

 

    	 	2	 

    	 

    

 

Section
3.03 Distributions. If the Pledgor shall become entitled to receive or shall receive (a) any stock certificate or voting
trust certificate, or (b) any certificate representing a stock dividend or a distribution in connection with any reclassification,
increase or reduction of capital or issued in connection with any liquidation, reorganization, option or rights, whether as an
addition to, in substitution of, or in exchange for any Pledged Collateral, the Pledgor shall (i) accept the same as the Secured
Party’s agent, (ii) hold the same in trust for the Secured Party, and (iii) deliver the same immediately to the Secured
Party in the exact form received, with an appropriate endorsement of the Pledgor and/or appropriate undated stock powers or assignment
of stock certificate or voting trust certificate, duly executed in blank, to be held by the Secured Party as Pledged Collateral,
subject to the terms hereof.

 

Section
3.04 Further Assurances. The Pledgor agrees that, at any time and from time to time after the date of this Pledge Agreement,
the Pledgor will promptly execute and deliver all further instruments and documents, and take all further actions, that may be
necessary or desirable, or that the Secured Party may request, in order to perfect and protect any security interest granted or
purported to be granted hereby or to enable the Secured Party to exercise and enforce its rights and remedies hereunder with respect
to the Pledged Collateral or, any portion thereof, including without limitation the execution and filing of any UCC financing
statement with respect to the Pledged Shares as the same may constitute “investment property” under the Uniform Commercial
Code.

 

Section
3.05 Taxes. The Pledgor agrees to pay or discharge prior to delinquency all taxes, assessments, levies and other governmental
charges imposed on it or its property, except the Pledgor shall not be required to pay or discharge any tax, assessment, levy
or other governmental charge if (a) the amount or validity thereof is being contested by the Pledgor in good faith by appropriate
proceedings diligently pursued, (b) such proceedings do not involve any danger of sale, forfeiture or loss of the Pledged Collateral
or any part or interest therein, and (c) adequate reserves therefor have been established in conformity with generally accepted
accounting principles.

 

Section
3.06 Notification. The Pledgor shall promptly notify the Secured Party of (a) any lien, security interest, encumbrance
or claim made or threatened against the Pledged Collateral, and (b) the occurrence or existence of any Event of Default (as hereinafter
defined) or the occurrence or existence of any condition or event that, with the giving of notice or lapse of time or both, would
be an Event of Default.

 

Article
IV

Rights of the Secured Party and the Pledgor

 

Section
4.01 Attorney-in-Fact. The Pledgor hereby appoints the Secured Party as the Pledgor’s attorney-in-fact, with full
authority in the place and stead of the Pledgor and in the name of the Pledgor or otherwise, from time to time in the discretion
of the Secured Party, to take any action and to execute any instrument which the Secured Party may deem necessary or advisable
to accomplish the purposes of this Pledge Agreement, including, without limitation, to receive, endorse and collect all instruments
made payable to the Pledgor representing any dividend, interest payment or other distribution in respect of the Pledged Collateral
or any part thereof and to give full discharge for the same.

 

    	 	3	 

    	 

    

 

Section
4.02 Voting Rights and Dividends. Except as otherwise provided in Section 5.02, the Pledgor shall be entitled to:

 

	 	(a)	exercise
    any and all voting and other consensual rights pertaining to the Pledged Collateral or any part thereof for any purpose not
    inconsistent with 11 the terms of this Pledge Agreement or the Agreement; provided, however, that the Pledgor shall not exercise,
    or shall refrain from exercising, any such right if, in the Secured Party’s reasonable judgment, such action would have
    a material adverse effect on the value of the Pledged Collateral or any part thereof; and
	 	 	 
	 	(b)	receive
    and retain all cash dividends or distributions paid on or in respect of the Pledged Collateral.

 

Section
4.03 Secured Party May Perform. If the Pledgor fails to perform any agreement contained herein, the Secured Party may perform,
or cause performance of, such agreement, and the expenses of the Secured Party incurred in connection therewith shall be payable
by the Pledgor under Section 6.01.

 

Section
4.04 Secured Party’s Duty of Care. Other than the exercise of reasonable care in the physical custody of the Pledged
Collateral while held by the Secured Party hereunder, the Secured Party shall have no responsibility for, or obligation or duty
with respect to, all or any part of the Pledged Collateral or any matter or proceeding arising out of or relating thereto, including,
without limitation, any obligation or duty to collect any sums due with respect thereto or to protect or preserve any rights against
prior parties or any other rights pertaining thereto, it being understood and agreed that the Pledgor shall be responsible for
preservation of all rights in the Pledged Collateral. Without limiting the generality of the foregoing, the Secured Party shall
be conclusively deemed to have exercised reasonable care in the custody of the Pledged Collateral if it takes such action for
purposes of preserving rights in the Pledged Collateral, as the Pledgor may reasonably request in writing; provided, however,
that no refusal, failure, omission or delay by the Secured Party in complying with any such request shall be deemed to be a failure
to exercise reasonable care.

 

Section
4.05 Releases of Pledged Collateral. The Secured Party agrees to release to Pledgor from the operation of this Pledge Agreement
198,238 of the Pledged Shares and 198,238 of the Pledged Warrants when $720,000 of the Pledgor’s Obligations has been paid.
The Secured Party agrees to release to Pledgor the balance of the Pledged Collateral from the operation of this Pledge Agreement
when $1,260,000 of the Pledgor’s Obligations has been paid.

 

Article
V

Default

 

Section
5.01 Event of Default. As used herein, the term “Event of Default” shall mean the occurrence of any
of the following events: (a) a failure by Pledgor to pay any Obligation that arises pursuant to the terms of the Agreement or
this Pledge Agreement, (b) the occurrence of any other default under the Agreement, (c) the Pledgor’s non-compliance with,
or failure to perform, any agreement contained herein, or (d) the making of any representation, statement or warranty of the Pledgor
contained herein or given pursuant hereto that is untrue as of the date made.

 

    	 	4	 

    	 

    

 

Section
5.02 Voting Rights and Dividends After an Event of Default. Upon the occurrence and during the continuance of an Event
of Default, all rights of the Pledgor to exercise the voting and other consensual rights and to receive cash dividends or other
distributions in respect of the Pledged Collateral, which the Pledgor would otherwise be entitled to exercise or receive pursuant
to Section 4.02, shall thereupon become vested in the Secured Party who shall thereupon have the sole right to exercise such voting
and other consensual rights and to receive and hold as Pledged Collateral such dividends or other distributions.

 

Section
5.03 Remedies Upon Default. If any Event of Default shall have occurred and be continuing, the Secured Party may, without
limiting any of its other rights or remedies at law or in equity, retain that portion of the Pledged Collateral which satisfies
the Obligations. Any cash held by the Secured Party as Pledged Collateral and all cash proceeds received by the Secured Party
in respect of any sale of, collection from or other realization upon all or any part of the Pledged Collateral may, in the discretion
of the Secured Party, be held by the Secured Party as collateral for, and/or then or at any time thereafter applied in whole or
in part by the Secured Party against, all or any part of the Obligations in such order as the Secured Party shall elect. Any surplus
of such cash or cash proceeds held by the Secured Party and remaining after payment in full of all of the Obligations shall be
paid over to the Pledgor or to whomsoever may be lawfully entitled to receive such surplus.

 

Article
VI

Miscellaneous

 

Section
6.01 Expenses. The Pledgor shall be liable for the amount of any and all reasonable expenses, including the reasonable
fees and expenses of counsel and of any experts and agents, which the Secured Party may incur in connection with (a) the administration
of this Pledge Agreement, (b) the custody, preservation, sale or collection of, or other realization upon, any of the Pledged
Collateral, (c) the exercise or enforcement of any of the rights of the Secured Party hereunder, or (d) the failure by the Pledgor
to perform or observe any of the provisions hereof.

 

Section
6.02 Absolute Security Interest. All rights of the Secured Party and the security interest hereunder, and all obligations
of the Pledgor hereunder, shall be absolute and unconditional irrespective of:

 

	 	(a)	any
    lack of validity or enforceability of any agreement or instrument relating hereto;
	 	 	 
	 	(b)	any
    change in the time, manner or place of payment of, or in any other term of, all or any of the Obligations, or any other amendment
    or waiver of or any consent to any departure from the Agreement;
	 	 	 
	 	(c)	any
    exchange, release or non-perfection of any other collateral, or any release or amendment or waiver of or consent to departure
    from any guaranty, for all or any of the Obligations; and
	 	 	 
	 	(d)	any
    other circumstance that might otherwise constitute a defense available to or a discharge of, the Pledgor in respect of the
    Obligations.

 

    	 	5	 

    	 

    

 

Section
6.03 Continuing Security Interest. This Pledge Agreement shall create a continuing security interest in the Pledged Collateral
and shall (a) remain in full force and effect until the expiration of the Obligations or the payment of $1,260,000 of the Obligations
arising under the Agreement and this Pledge Agreement, (b) be binding upon the Pledgor, its heirs, successors and assigns, and
(c) inure to the benefit of the Secured Party and its successors, transferees and assigns.

 

Section
6.04 Amendments and Waivers. No amendment or waiver of any provision of this Pledge Agreement, nor consent to any departure
by the Pledgor herefrom, shall in any event be effective unless the same shall be in writing and signed by the Secured Party,
and then such waiver or consent shall be effective only in the specific instance and for the specific purpose for which given.

 

Section
6.05 Addresses for Notices. Any notice, consent, demand, request, approval or other communication to be given under this
Pledge Agreement by either party to the other shall be in writing and shall be either (a) delivered in person, (b) mailed by registered
or certified mail, return receipt requested, postage prepaid, or (c) delivered by overnight express delivery service or same-day
local courier service, (d) or by email, (1) if to Pledgor, at PoC Capital, LLC, 2995 Woodside Rd, Suite 400-121, Woodside,
CA 94062 , Attention: Daron Evans , and (2) if to Secured Party, to Processa Pharmaceuticals, Inc., 7380 Coca Cola Drive,
Suite 106, Hanover, MD 21076, Attention: Wendy Guy, email: wguy@processapharmaceuticals.com, or to such other address as may be
designated by the parties from time to time in accordance with this Section.

 

Notices,
consents, or other communications delivered personally, by overnight express delivery service or by courier service, or by email
shall be deemed given as of actual receipt. Mailed notices shall be deemed given three business days after mailing.

 

Section
6.06 Termination. Upon the expiration of the Obligations or the payment of $1,260,000 of the Obligations arising under
the Agreement and this Pledge Agreement, or at such earlier time as the Secured Party may specify in writing, this Pledge Agreement
shall terminate, and the Secured Party shall forthwith cause to be assigned, transferred and delivered, against receipt but without
recourse, warranty or representation whatsoever, any remaining Pledged Collateral to the Pledgor.

 

Section
6.07 Headings. The headings and captions used herein are for convenience only and shall not affect the interpretation of
this Pledge Agreement.

 

Section
6.08 Survival of Representations and Warranties. All representations and warranties made in this Pledge Agreement or in
any certificate delivered pursuant hereto shall survive the execution and delivery of this Pledge Agreement, and no investigation
by the Secured Party shall affect the representations and warranties or the right of the Secured Party to rely upon them.

 

Section
6.09 Counterparts. This Pledge Agreement may be executed in any number of counterparts, each of which shall be deemed an
original, but all of which together shall constitute one and the same instrument.

 

    	 	6	 

    	 

    

 

Section
6.10 Severability. Any provision of this Pledge Agreement which is prohibited or unenforceable in any jurisdiction shall,
as to such jurisdiction, be ineffective to the extent of such prohibition or unenforceability without invalidating the remaining
provisions of this Pledge Agreement.

 

Section
6.11 Number and Gender. Whenever the context requires, references in this Pledge Agreement to the singular number shall
include the plural, and the plural number shall include the singular, and words denoting gender shall include the masculine, feminine
and neuter.

 

Section
6.12 Governing Law and Venue. The parties acknowledge and agree that this Pledge Agreement and the obligations and undertakings
of the parties hereunder will be performable in Howard County, Maryland. This Pledge Agreement shall be governed by, and construed
in accordance with, the laws of the State of Delaware. If any action is brought to enforce or interpret this Pledge Agreement,
venue for such action shall be in Howard County, Maryland.

 

[The
remainder of this page intentionally left blank; signature page follows]

 

    	 	7	 

    	 

    

 

IN
WITNESS WHEREOF, the undersigned have caused this Pledge Agreement to be duly executed as of the date first above written.

 

	 	PLEDGOR
	 	 	 
	 	PoC Capital, LLC
	 	 	 
	 	By:	/s/
Daron Evans
	 	Name: 	Daron
    Evans
	 	Title:	Managing
    Director

 

	 	SECURED
    PARTY
	 	 	 
	 	Processa Pharmaceuticals, Inc.
	 	 	 
	 	By:	/s/
    David Young
	 	Name: 	David
    Young
	 	Title:	Chief
    Executive Officer

 

    	 	8EX-4.1

 Exhibit 4.1 
  

 
 SEE REVERSE FOR CERTAIN DEFINITIONS CUSIP 54142F 10 2 THIS CERTIFIES THAT is the owner of THIS CERTIFICATE IS TRANSFERABLE IN CITIES
DESIGNATED BY THE TRANSFER AGENT, AVAILABLE ONLINE AT www.computershare.com PO BOX 43004, Providence, RI 02940-3004 MR A SAMPLE DESIGNATION (IF ANY) ADD 1 ADD 2 ADD 3 ADD 4 CUSIP/IDENTIFIER XXXXXX XX X Holder ID XXXXXXXXXX Insurance Value
00.1,000,000 Number of Shares 123456 DTC 12345678901234512345678 Certificate Numbers Num/No Denom. Total. 1234567890/1234567890 111 1234567890/1234567890 222 1234567890/1234567890 333 1234567890/1234567890 444 1234567890/1234567890 555
1234567890/1234567890 666 Total Transaction 7 COMMON STOCK PAR VALUE $$0.0001 Certificate Shares Number ZQ00000000 LOGICBIO THERAPEUTICS, INC. INCORPORATED UNDER THE LAWS OF THE STATE OF DELAWARE CERTIFICATE IS TRANSFERABLE IN ***ZERO HUNDRED
THOUSAND FULLY-PAID AND NON-ASSESSABLE SHARES OF COMMON STOCK OF LogicBio Therapeutics, Inc. (hereinafter called the “Company”), transferable on the books of the Company in person or by duly
authorized attorney, upon surrender of this Certificate properly endorsed. This Certificate and the shares represented hereby, are issued and shall be held subject to all of the provisions of the Certificate of Incorporation, as amended, and the By-Laws, as amended, of the Company (copies of which are on file with the Company and with the Transfer Agent), to all of which each holder, by acceptance hereof, assents. This Certificate is not valid unless
countersigned and registered by the Transfer Agent and Registrar. Witness the facsimile seal of the Company and the facsimile signatures of its duly authorized officers. H E COUNTERSIGNED AND REGISTERED: FACSIMILE SIGNATURE TO COME T O UT O RP RA I
I O T C COMPUTERSHARE TRUST COMPANY, N.A. B C E S President I C , TRANSFER AGENT AND REGISTRAR, 08/04/14 FACSIMILE SIGNATURE TO COME AWA Secretary AUTHORIZED SIGNATURE 

 

 
 LOGICBIO THERAPEUTICS, INC. THE COMPANY WILL FURNISH WITHOUT CHARGE TO EACH SHAREHOLDER WHO SO REQUESTS, A SUMMARY OF THE POWERS,
DESIGNATIONS, PREFERENCES AND RELATIVE, PARTICIPATING, OPTIONAL OR OTHER SPECIAL RIGHTS OF EACH CLASS OF STOCK OF THE COMPANY AND THE QUALIFICATIONS, LIMITATIONS OR RESTRICTIONS OF SUCH PREFERENCES AND RIGHTS, AND THE VARIATIONS IN RIGHTS,
PREFERENCES AND LIMITATIONS DETERMINED FOR EACH SERIES, WHICH ARE FIXED BY THE ARTICLES OF INCORPORATION OF THE COMPANY, AS AMENDED, AND THE RESOLUTIONS OF THE BOARD OF DIRECTORS OF THE COMPANY, AND THE AUTHORITY OF THE BOARD OF DIRECTORS TO
DETERMINE VARIATIONS FOR FUTURE SERIES. SUCH REQUEST MAY BE MADE TO THE OFFICE OF THE SECRETARY OF THE COMPANY OR TO THE TRANSFER AGENT. THE BOARD OF DIRECTORS MAY REQUIRE THE OWNER OF A LOST OR DESTROYED STOCK CERTIFICATE, OR HIS LEGAL
REPRESENTATIVES, TO GIVE THE COMPANY A BOND TO INDEMNIFY IT AND ITS TRANSFER AGENTS AND REGISTRARS AGAINST ANY CLAIM THAT MAY BE MADE AGAINST THEM ON ACCOUNT OF THE ALLEGED LOSS OR DESTRUCTION OF ANY SUCH CERTIFICATE. The following abbreviations,
when used in the inscription on the face of this certificate, shall be construed as though they were written out in full according to applicable laws or regulations: TEN COM—as tenants in common UNIF GIFT MIN ACT Custodian (Cust) (Minor) TEN
ENT—as tenants by the entireties under Uniform Gifts to Minors Act (State) JT TEN—as joint tenants with right of survivorship UNIF TRF MIN ACT -Custodian (until age ) and not as tenants in common (Cust) .under Uniform Transfers to Minors
Act. (Minor) (State) Additional abbreviations may also be used though not in the above list. PLEASE INSERT SOCIAL SECURITY OR OTHER IDENTIFYING NUMBER OF ASSIGNEE For value received, hereby sell, assign and transfer unto (PLEASE PRINT OR TYPEWRITE
NAME AND ADDRESS, INCLUDING POSTAL ZIP CODE, OF ASSIGNEE) Shares of the common stock represented by the within Certificate, and do hereby irrevocably constitute and appoint Attorney to transfer the said stock on the books of the within-named Company
with full power of substitution in the premises. Dated: 20 Signature(s) Guaranteed: Medallion Guarantee Stamp THE SIGNATURE(S) SHOULD BE GUARANTEED BY AN ELIGIBLE GUARANTOR INSTITUTION (Banks, Stockbrokers, Savings and Loan Associations and Credit
Unions) WITH MEMBERSHIP IN AN APPROVED SIGNATURE GUARANTEE MEDALLION PROGRAM, PURSUANT TO S.E.C. RULE 17Ad-15. Signature: Signature: Notice: The signature to this assignment must correspond with the name as
written upon the face of the certificate, in every particular, without alteration or enlargement, or any change whatever. The IRS requires that the named transfer agent (“we”) report the cost basis of certain shares or units acquired after
January 1, 2011. If your shares or units are covered by the legislation, and you requested to sell or transfer the shares or units using a specific cost basis calculation method, then we have processed as you requested. If you did not specify a
cost basis calculation method, then we have defaulted to the first in, first out (FIFO) method. Please consult your tax advisor if you need additional information about cost basis. If you do not keep in contact with the issuer or do not have any
activity in your account for the time period specified by state law, your property may become subject to state unclaimed property laws and transferred to the appropriate state.

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